Reserve Requirements A Better Safeguard Against Financial Crisis, Palley Argues

    Regulating financial markets by means of asset-based reserve requirements could be more effective in preventing future financial crises than reforming them using capital standards, Thomas Palley writes in an article that would be published in a forthcoming book.

    The use of ABRRs provides many benefits, the New America Foundation researcher asserts. At the microeconomic level, he argues that ABRRs can be used to finance public projects to boost environmental protection and urban development. The use of ABRRs would also allow city governments to expand their educational services, provide home ownership opportunities, and carry out other projects that promote development, Palley states.

    About the author

    • Ivy Mungcal

      As former senior staff writer, Ivy Mungcal contributed to several Devex publications. Her focus is on breaking news, and in particular on global aid reform and trends in the United States, Europe, the Caribbean, and the Americas. Before joining Devex in 2009, Ivy produced specialized content for U.S. and U.K.-based business websites.