In a speech at the Minsky Conference on the State of the U.S. and World Economies, Federal Reserve Bank of Cleveland President and CEO Sandra Pianalto discussed consolidated supervision, an important, but sometimes overlooked, aspect of regulatory reform. She also described the criteria that she...

In a speech to Ohio and Illinois bankers, Federal Reserve Bank of Cleveland President Sandra Pianalto discusses the regulatory reform process and explains why it is important for the regulatory framework to distinguish between firms that pose significant risk to the financial system and those...

A study that models the regulatory decision to close a bank as a call option. A two-equation model of bank failure that treats closings as regulatorily timed events is compared with two single-equation models for accuracy.

The author develops an empirical model to value a financial institution's capital for regulatory purposes, which when estimated for a sample of failed and nonfailed institutions, reveals the need for a market-value accounting approach to capital.

A clarification of the distinction between risk and failure in assessing bank diversification, showing how increasing bank size may increase bank risk even though it lessens the probability of failure and lowers the expected loss.

The development of a model of large-bank failures that studies insolvency and failure simultaneously and that recognizes economic, political, and bureaucratic constraints faced by regulators.

The author develops a model that examines the regulator's role in the bank failure decision process, with attention given to the regulator's constraints and incentives.

An analysis of the impact of depositor preference laws on the cost of debt capital for banks and on the value of FDIC deposit guarantees. The authors find that depositor preference laws increase the value of uninsured deposit claims and reduce the size of the FDIC subsidy, but will not affect...

An examination of the empirical impact of depositor preference legislation (DPL) on resolution type and resolution costs for commercial banks. It focuses on the impact of state DPL statutes, using FDIC and call-report data on resolution costs and types for all operating FDIC-BIF insured...

An explanation of the relationship between interbank exposure and the too big to fail doctrine, with an examination of the interbank exposure of U.S. banks between March 1984 and March 1990.