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An institutional architecture for meta-risk regulation in Irish banking: Lessons from Anglo Irish Bank’s Minsky moment

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Abstract

The article maps the risk management failures within Anglo Irish Bank, showing that, when banks are systemic in nature, poor internal corporate governance within a Minsky credit cycle can lead to destabilising macroeconomic conditions, which may prolong the effects of a credit-induced downturn. The article highlights a failure of management at Anglo Irish Bank to establish and measure firm-level risks and develop appropriate internal controls to support a culture of prudent credit management. We propose the adoption of a novel supervisory architecture based on the meta-risk regulatory philosophy, which is designed to strengthen risk management practices at banks.

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Authors and Affiliations

  1. Department of Economics, Kemmy Business School, University of Limerick, Limerick, Ireland

    Kenneth Patrick Vincent O'Sullivan & Stephen Kinsella

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  1. Kenneth Patrick Vincent O'Sullivan
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  2. Stephen Kinsella
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Correspondence to Kenneth Patrick Vincent O'Sullivan.

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O'Sullivan, K., Kinsella, S. An institutional architecture for meta-risk regulation in Irish banking: Lessons from Anglo Irish Bank’s Minsky moment. J Bank Regul 12, 342–355 (2011). https://doi.org/10.1057/jbr.2011.13

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