Document Type


Publication Date



systemic risk, bank failures, financial crises, bank regulation


Although a chain of bank failures remains an important symbol of systemic risk, the ongoing trend towards disintermediation—or enabling companies to directly access the ultimate source of funds, the capital (i.e., financial) markets, without going through banks or other financial intermediaries—is making these failures less critical than in the past. While banks and other financial institutions remain important sources of capital, companies today are able to obtain most of their financing through financial markets without the use of intermediaries. As a result, financial markets themselves are increasingly central to any examination of systemic risk.


This article is based on a keynote address at the March 2011 George Mason University AGEP Advanced Policy Institute on Financial Services Regulation.

Library of Congress Subject Headings

Risk management, Bank failures, Financial crises, Risk assessment, Banking law, Banks and banking--State supervision