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The determinants of systemic importance

Moore, Kyle and Zhou, Chen (2014) The determinants of systemic importance. SRC Discussion Paper (No 19). Systemic Risk Centre, The London School of Economics and Political Science, London, UK.

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Abstract

This paper empirically analyses the determinants of banks’ systemic importance. With applying a novel measure on the systemic importance to US bank holding companies in 2000–2010, we show that size is an important determinant of systemic importance, but banks with size above a certain threshold have equal systemic importance. On top of size, engaging heavily in non-traditional banking activities, such as relying on money market fund and generating non-interest income, is also related to high systemic importance. Therefore, in addition to “Too big to fail”, systemically important financial institutions can also be identified by a “Too non-traditional to fail” principle.

Item Type: Monograph (Discussion Paper)
Official URL: http://www.systemicrisk.ac.uk/
Additional Information: © 2014 Systemic Risk Centre, The London School of Economics and Political Science
Divisions: Systemic Risk Centre
Subjects: H Social Sciences > HB Economic Theory
Sets: Research centres and groups > Systemic Risk Centre
Date Deposited: 29 Aug 2014 10:32
Last Modified: 19 Mar 2019 00:03
Funders: Economic and Social Research Council
URI: http://eprints.lse.ac.uk/id/eprint/59289

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