regulators try to resolve these problems. We find that liberalizing bank capital flows between economies reduces total welfare by … field' forcing international harmonization of capital requirements and deposit rates across economies. Such a policy is good … for weaker regulators whereas a laissez-faire policy under which each country chooses its own capital requirement is …

that is able to bail out the bank either by injecting capital at a fixed return or by receiving an equity claim. This …

Banking regulation has proven to be inadequate to guard systemic stability in the recent financial crisis. Central … induces moral hazard. Therefore, we introduce a fiscal authority that is able to bail out the bank by injecting capital. This …

for granted. As regulation of dynamic financial markets will inevitably be imperfect, prudent governments need to adjust …

provide capital, and banks, which may take excess risk if they believe the regulator will provide capital. When the regulator …'s cost of injecting capital is private information, it manages expectations by using costly signals: (i) A regulator with a … low cost of injecting capital may forbear on bad banks to signal toughness and reduce risk taking, and (ii) A regulator …

market-restricting approach to regulation; it would imply price-based capital and liquidity regulation, rather than …The recent crisis has led to a thriving academic and policy debate on the future regulation of financial institutions …-taking decisions rather than suppressing financial innovation. Beyond changes in the capital and liquidity requirements and corporate …

2007 and 2009. This pattern is related to the functioning of the internal capital market through which these banks funnel … funds across their units. The internal capital market has been an effective tool to support foreign affiliates in distress … countries, thus showing complementarity between economic integration and multinational banks’ internal capital markets. In light …