Role of Crises in Shaping Financial Systems

Małgorzata Iwanicz-Drozdowska is a Full Professor of Economics and Finance and head of the Financial System Department at SGH Warsaw School of Economics, Poland. Elżbieta Malinowska-Misiąg is an Assistant Professor at the Financial System Department, SGH Warsaw School of Economics, Poland. Piotr Mielus is an Associate Professor of Economics and Finance at SGH Warsaw School of Economics, Poland. Paweł Smaga is an Associate Professor at the Financial System Department, SGH Warsaw School of Economics, Poland. Bartosz Witkowski is a Full Professor of Economics and Head of the Institute of Econometrics at SGH Warsaw School of Economics, Poland.

• 1. Chapter 1. Introduction, 2. Chapter 2. Safety net reactions to crises, 2.1. Monetary response, 2.2. Prudential response, 2.2.1. Regulatory measures, 2.2.2. Lessons learned? Impact of regulatory and institutional overhaul, 2.2.3. First experiences with macroprudential policy in the EU, 2.3. In the eye of the storm - crises and banking sector financial standing, 2.3.1. Pre- and post-crisis trends in the European banking sector condition, 2.3.2. Determinants of bank soundness during crises, 3. Chapter 3. Fiscal policy reaction to crises, 3.1. Policy response – towards strengthening European integration, 3.1.1. EU emergency and recovery initiatives, 3.1.2. Tailoring the state aid framework, 3.1.3. Strengthening the fiscal framework, 3.1.4. Financial assistance facilities, 3.2. Support measures for the financial system – case studies, 3.2.1. Ireland, 3.2.2. Greece, 3.2.3. Cyprus, 3.3. Support measures for the real economy – case studies, 3.3.1. Germany, 3.3.2. Poland, 3.4. Balancing fiscal and financial stability, 4. Chapter 4. Financial markets in crises, 4.1. Origin of asset pricing – who drives the market in a crisis?, 4.2. Financial markets in crisis – a victim or a culprit?, 4.3. Emerging markets asymmetry – how contagion works?, 4.4. Case studies for foreign exchange, interest rate, liquidity and equities, 5. Chapter 5. The interplay between the financial sphere and the real sphere, 5.1. Finance and growth nexus – state of play, 5.2. Tail wagging the dog?, 5.3. Financial and real spheres in Western and Eastern Europe , 5.3.1. Financial and real spheres in Europe, 5.3.2 Data and methodology, 5.3.3 Results and discussion. Tail (finance) wagging the dog? 6. Chapter 6. Challenges ahead