We model the interaction between two economies where banks exhibit both adverse selection and moral hazard and bank … regulators try to resolve these problems. We find that liberalizing bank capital flows between economies reduces total welfare by … considerations arise in this context. Allowing multinationals improves welfare when bank capital can flow across borders, despite the …

exhibits both adverse selection and moral hazard. Depositors do not fully account for the social benefits accruing from bank …

We analyse a model in which bank deposits are insured and there is an exogenous cost of bank capital. The former effect … results in bank over-investment and the latter in under-investment. Regulatory capital requirements introduce investment … upon the home bank’s riskiness, the extent of international diversification, and the liability structure (branch or …

We investigate the optimal regulation of financial conglomerates that combine a bank and a non-bank financial … not only of the present debate on the regulation of financial conglomerates but also in the light of existing US bank …

by interbank lending. This paper shows that common regulation is also a conduit for interbank contagion. One bank … behaviour can be privately to exhibit forbearance to a failing bank. We show that regulatory transparency improves confidence ex …

We examine the interdependency between loan officer compensation contracts and commercial bank internal reporting … systems (IRSs). The optimal incentive contract for bank loan officers may require the bank headquarters to commit not to act … information flow within the bank. We show that origination fees for loan officers emerge naturally as part of the optimal contract …

This paper analyzes the consequences of bank diversification into fee-based businesses. Universal banks raise welfare …