This report presents an overview of the theory of regulation in general, with special attention for the regulation of banks. Two theories of government regulation are described. The first, normative, theory uses market failures as the justification of government regulation. The second, positive,...

Government bonds receive preferential treatment in financial regulation. The purpose of this paper is to analyze the impact of this preferential treatment on banks' demand for government bonds. Using unique transaction-level data, our analysis suggests that preferential treatment in liquidity...

The Diamond-Dybvig model provides an explanation for: (1) the existence of banks as a risk sharing agreement between depositors against unexpected liquidity needs, (2) bank runs as an act of collective irrationality by rational depositors, and (3) the introduction of deposit insurance as an...

We use British household panel data to explore the wage returns to training incidence and intensity (duration) for 6924 employees. We find these returns differ greatly depending on the nature of the training (general or specific); who funds the training (employee or employer); and the skill...

We use linked data for 1,460 workplaces and 19,853 employees from the Workplace Employee Relations Survey 1998 to analyse the incidence and duration of employee training in Britain. We find training to be positively associated with having a recognised vocational qualification and current union...