A key outcome of the crisis has been to reduce externalities imposed by banks on taxpayers via moral hazard induced by the too-big-to-fail problem. The solution so far has been to mandate that G-SIBs internalize such costs by having higher capital requirements, and to shield taxpayers by mandating a clear structure of bank liabilities with […]
Carmelo Salleo is currently Head of the Macro-Financial Policies Division at the ECB. The tasks of the Division include organizing and providing analytical support to macro-prudential decision-making in the ECB, including coordinating with national authorities and micro-prudential supervisors. Previously he was Adviser at the ESRB Secretariat, where he coordinated analytical activities to support financial stability oversight and macro-prudential policy making, including the operationalization of macro-prudential instruments in the European Union, stress testing and insurance related financial stability topics. He was previously Head of Unit at the Research Department of the Bank of Italy, with a focus on financial flows and on the relationship between banks and the real economy in Italy and the euro area. He started at the Bank of Italy in 1995, in the Banking Supervision Department. He holds a PhD in Economics from Harvard University.