A term that emerged after 2000 for the (empirical) fact that, with strict, persistent monitoring of banks by the supervisory authorities, a complete financial collapse of an economy remains virtually impossible. In the USA, this insight was incorporated into the Sarbanes-Oxley Act in 2002. – Of course, this presupposes first and foremost that institutions also report their risks on their balance sheets and do not transfer them to off-balance sheet special purpose vehicles, as became apparent in the course of the subprime crisis. – See Financial Alchemy, Securitization Structure.
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University Professor Dr. Gerhard Merk, Dipl.rer.pol., Dipl.rer.oec.
Professor Dr. Eckehard Krah, Dipl.rer.pol.
E-mail address: info@ekrah.com
https://de.wikipedia.org/wiki/Gerhard_Ernst_Merk
https://www.jung-stilling-gesellschaft.de/merk/
https://www.gerhardmerk.de/