From Calamity to Stability: Harnessing the Wisdom of Past Financial Crises to Build a Stable and Resilient Global Financial System

By Josh Luberisse

In 'From Calamity to Stability: Harnessing the Wisdom of Past Financial Crises to Build a Stable and Resilient Global Financial System', author Josh delves deep into the history of financial crises, examining the causes, impacts, and lessons learned from each event. With a keen analytical approach, Josh expertly navigates the complex landscape of financial regulation, supervision, and policy that has evolved in response to these crises.

Drawing on a wealth of research and firsthand experience, the book presents a comprehensive overview of the regulatory frameworks that have emerged over time, from the Glass-Steagall Act to the Dodd-Frank Wall Street Reform and Consumer Protection Act, as well as the development of international standards such as the Basel Accords. By analyzing the interplay between innovation and stability, Josh identifies key areas where further action is necessary to maintain a resilient financial system capable of supporting sustainable economic growth.

Through a careful examination of the role of international cooperation, transparency, and trust in fostering financial stability, 'From Calamity to Stability' offers valuable insights into the challenges and opportunities facing policymakers, financial institutions, and society at large. The book not only underscores the importance of learning from past financial crises but also highlights the need for a flexible, forward-looking regulatory framework that can adapt to emerging trends and challenges.

'From Calamity to Stability' is an essential resource for anyone seeking to understand the complex dynamics of the global financial system and the ongoing efforts to ensure its stability and resilience. With its balanced and informed perspective, this book provides a compelling roadmap for navigating the uncertain global economic landscape and building a more secure financial future for all.

• Language: English
• Publisher: Fortis Novum Mundum
• Release date: Aug 3, 2023
• ISBN: 9798223295082

Josh Luberisse

Josh, a multifaceted entrepreneur and renowned author, has carved a niche for himself in the spheres of artificial intelligence, geopolitics, finance, and cybersecurity. With a myriad of authoritative books to his credit on these subjects, he is undeniably a luminary in the domain. Not just an author, Josh is also the charismatic host of "Innovate Now: The Pulse of Future Technologies," a groundbreaking podcast that unravels the intricacies of nascent technologies and the imminent future of innovation, accentuating on avant-garde progressions in AI, fintech, and quantum computing. His eclectic professional journey is an embodiment of diverse experiences. From serving at financial behemoths like Citi, Bank of America, BNY Mellon, Morgan Stanley, to JP Morgan Chase, his immersion in the financial industry is profound. His multilateral expertise as a licensed real estate agent, tax advisor, and a sagacious planner for retirement and estates accentuates the depth and breadth of his knowledge, enabling him to write with an unparalleled, informed perspective.  However, it's not just the financial world that has witnessed Josh's Midas touch. As an astute entrepreneur, Josh has birthed and nurtured several startups. His brainchild, Neuromorph Systems, stands as a testament to his vision. A future global tech titan, it specializes in data management, system integration, and artificial intelligence. With a mission to shield the pivotal systems of its global clientele and concurrently offer them unparalleled data management, visualization, and analysis capabilities. In the realm of venture capital, Josh's VC firm, Other People's Capital, emerges as a game-changer. Dedicated to bolstering founders with groundbreaking ideas, the company's expertise lies in fostering and propelling enterprises that have the potential to define entire categories. With a track record replete with highly successful exits, Other People's Capital has a legacy of identifying and nurturing businesses that ascend to industry leadership. Josh's journey, from his stint in the financial realm to his foray into the world of startups, underlines his unmatched expertise and vision. As a thought leader, seasoned practitioner, and an indomitable entrepreneur, his writings and ventures are not just about envisioning the future but also about shaping it.

Book preview

From Calamity to Stability

Harnessing the Wisdom of Past Financial Crises to Build a Stable and Resilient Global Financial System

Josh Luberisse

Fortis Novum Mundum

Copyright © 2023 Fortis Novum Mundum

All rights reserved

The characters and events portrayed in this book are fictitious. Any similarity to real persons, living or dead, is coincidental and not intended by the author.

Any content provided herein should not be relied upon as advice or construed as providing recommendations of any kind.

Past results are no indication of future performance. In no event should the content of this correspondence be construed as an express or implied promise or guarantee.

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DISCLOSURE

This communication is for informational purposes only, and contains general information only. Other People’s Capital, LLC is not, by means of this communication, rendering accounting, business, financial, investment, legal, tax, or other professional advice or services. This publication is not a substitute for such professional advice or services nor should it be used as a basis for any decision or action that may affect your business or interests. Before making any decision or taking any action that may affect your business or interests, you should consult a qualified professional advisor. This communication is not intended as a recommendation, offer or solicitation for the purchase or sale of any security. Other People’s Capital, LLC  does not assume any liability for reliance on the information provided herein.

DISCLAIMER

Any content provided herein should not be relied upon as advice or construed as providing recommendations of any kind. It is your responsibility to confirm and decide which trades to make.

Trade only with risk capital; that is, trade with money that, if lost, will not adversely impact your lifestyle and your ability to meet your financial obligations.

Past results are no indication of future performance.

In no event should the content of this correspondence be construed as an express or implied promise or guarantee.

Trading carries a high level of risk, and may not be suitable for all investors. Before deciding to invest you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. Futures, stocks and options trading involves substantial risk of loss and is not suitable for every investor. The valuation of futures, stocks and options may fluctuate, and, as a result, clients may lose more than their original investment.

The impact of seasonal and geopolitical events is already factored into market prices. The highly leveraged nature of futures trading means that small market movements will have a great impact on your trading account and this can work against you, leading to large losses or can work for you, leading to large gains.

The author of this book is not responsible for any losses incurred as a result of using any of our trading strategies.

Loss-limiting strategies such as stop loss orders may not be effective because market conditions or technological issues may make it impossible to execute such orders. Likewise, strategies using combinations of options and/or futures positions such as spread or straddle trades may be just as risky as simple long and short positions. Information provided in this correspondence is intended solely for informational purposes and is obtained from sources believed to be reliable. Information is in no way guaranteed.

No guarantee of any kind is implied or possible where projections of future conditions are attempted.

None of the content published constitutes a recommendation that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person. None of the information providers or their affiliates will advise you personally concerning the nature, potential, value or suitability of any particular security, portfolio of securities, transaction, investment strategy or other matter.

By reading this book, the reader agrees that under no circumstances is the author responsible for any losses, direct or indirect, which are incurred as a result of the use of the information contained within this manuscript, including but not limited to errors, omissions, or inaccuracies.

Long run is a misleading guide to current affairs. In the long run we are all dead.

John Maynard Keynes

I have found a flaw... in the model that I perceived as the critical functioning structure that defines how the world works, so to speak.

Alan Greenspan

More money has been lost because of four words than at the point of a gun. Those words are ‘This time is different....The essence of the this-time-is-different syndrome is simple. It is rooted in the firmly held belief that financial crises are things that happen to other people in other countries at other times; crises do not happen to us, here and now.

Carmen M. Reinhart, This Time Is Different: Eight Centuries of Financial Folly

Contents

Title Page

Copyright

DISCLOSURE

DISCLAIMER

Epigraph

Epigraph

Epigraph

Table of Contents

Chapter 1: Introduction

Chapter 2: Fundamentals of Financial Stability and Resilience

Chapter 3: The Evolution of Banking Regulation

Chapter 4: Key Crises that Shaped the Regulatory Landscape

Chapter 5: Major Regulatory Responses to Past Financial Crises

Chapter 6: Key Lessons from Past Crises

Chapter 7: Regulatory Tools for Ensuring Financial Stability and Resiliency

Chapter 8: Monitoring and Assessing Financial Stability and Resilience

Chapter 9: Balancing Innovation and Regulation

Conclusion

References

About The Author

Books By This Author

Table of Contents

Chapter 1: Introduction

Importance of trust in the Banking System

Ensuring Stability and Resiliency through Regulation

Impact of Financial Crises on Banking Regulation

Chapter 2: Fundamentals of Financial Stability and Resilience

Introducing Financial Stability and Resilience

Key Components of a Stable Financial System

Tools used by Regulators to Promote Financial Stability and Resilience

Chapter 3: The Evolution of Banking Regulation

Historical overview of banking regulation and supervision

Deregulation and the rise of financial innovation

Chapter 4: Key Crises that Shaped the Regulatory Landscape

The Great Depression and the birth of modern banking regulation

The Savings and Loan Crisis and the emergence of stronger oversight

The Asian Financial Crisis and the push for international cooperation

The 2008 Global Financial Crisis and the post-crisis regulatory landscape

Bonus: The 2014 Russian Financial Crisis

Chapter 5: Major Regulatory Responses to Past Financial Crises

Basel Accords: international banking standards

The Dodd-Frank Wall Street Reform and Consumer Protection Act

The European Banking Union

The rise of the Financial Stability Board

Chapter 6: Key Lessons from Past Crises

The importance of early warning signals

The need for robust Capital Requirements and Risk Management Practices

The role of transparency and communication in restoring trust

Chapter 7: Regulatory Tools for Ensuring Financial Stability and Resiliency

Prudential regulation and supervision

Macroprudential policy

Crisis management and resolution

Financial market infrastructure oversight

Cross-border cooperation and coordination

Chapter 8: Monitoring and Assessing Financial Stability and Resilience

Monitoring Systemic Risk and Maintaining Stability

Financial stability reports

Stress testing

Risk assessments and thematic reviews

Chapter 9: Balancing Innovation and Regulation

The impact of technology on banking and regulation

Fostering innovation while maintaining stability and security

Navigating an uncertain global economic landscape

Conclusion

References

Chapter 1: Introduction

Importance of Trust in the Banking System

Trust is the cornerstone of the banking system. It is a fundamental aspect that underpins the relationship between banks, customers, and other stakeholders. Trust is necessary for maintaining the stability of the financial system, fostering economic growth, and ensuring the efficient functioning of the banking sector. In this unit, we will discuss the various dimensions of trust in the banking system and explain why it is crucial for the success and resilience of the financial sector.

Trust Between Customers and Banks

The relationship between customers and banks is built on the premise of trust. Customers trust banks to safeguard their deposits, facilitate transactions, and provide credit for personal and business purposes. This trust is primarily founded on the belief that banks are competent and reliable institutions that adhere to a set of rules and regulations designed to protect the interests of their customers.

When customers trust their banks, they are more likely to use the services provided by these institutions. Depositors feel confident in placing their savings in banks, borrowers are more inclined to seek credit, and investors are more likely to invest in financial products offered by these institutions. This, in turn, promotes economic growth and financial stability.

However, when trust is compromised, the consequences can be severe. A loss of trust can lead to bank runs, as depositors rush to withdraw their funds, fearing that the bank may become insolvent. This can cause severe liquidity problems for banks, leading to a potential collapse of the financial system.

Trust Between Banks and Regulators

Trust also plays a significant role in the relationship between banks and regulators. Regulators trust banks to comply with the rules and regulations designed to maintain the safety and soundness of the financial system. This trust is established through a framework of supervision and examination, which enables regulators to assess the performance, risk management practices, and compliance of banks with the relevant regulatory standards.

In return, banks trust regulators to establish a fair and transparent regulatory environment that promotes stability and growth in the financial sector. This includes the creation of clear and consistent rules, effective enforcement mechanisms, and a commitment to adapt the regulatory framework in response to changing economic and financial conditions.

When trust between banks and regulators is strong, the financial system operates more effectively, with banks more likely to comply with regulatory requirements, and regulators more capable of identifying and addressing potential risks to the stability of the financial system.

Trust Within the Banking System

Trust is also essential for the efficient functioning of the banking system itself. Banks engage in numerous transactions with one another, such as interbank lending, foreign exchange trading, and the settlement of securities transactions. The smooth functioning of these activities relies on trust between banks, based on the belief that counterparties will honor their obligations and fulfill their commitments.

When trust between banks is eroded, the financial system can become vulnerable to contagion and systemic risk. A lack of trust may lead banks to become more cautious