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Ethical Foundations of Financial Regulation
Kane, Edward J. - 1997
Regulation consists of rulemaking and enforcement. Economic theory offers two complementary rationales for regulating … and efficiency across society as a whole. Agency-cost theory recognizes that incentive conflicts and coordination problems … arise in multi- party relationships and that regulation introduces opportunities to impose rules that enhance the welfare of …
Persistent link: https://www.econbiz.de/10012472798
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Macroprudential Policies in Open Emerging Economies
Hahm, Joon-Ho - 2012
This paper examines macroprudential policies in open emerging economies. It discusses how the recent financial crisis has provided a rationale for macroprudential policies to help manage the economy and the need for policymakers to monitor the financial cycle and systemic risks. It also...
Persistent link: https://www.econbiz.de/10012460878
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Durable Financial Regulation : Monitoring Financial Instruments as a Counterpart to Regulating Financial Institutions
Nakamura, Leonard - 2011
This paper sets forth a discussion framework for the information requirements of systemic financial regulation. It …
Persistent link: https://www.econbiz.de/10012461652
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Using Deferred Compensation to Strengthen the Ethicsof Financial Regulation
Kane, Edward J. - 2001
Defects in the corporate governance of government-owned enterprises tempt opportunistic officials to breach duties of public stewardship. Corporate-governance theory suggests that incentive-based deferred compensation could intensify the force that common-law duties actually exert on regulatory...
Persistent link: https://www.econbiz.de/10012470321
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Safety-Net Benefits Conferred on Difficult-to-Fail-and-Unwind Banks in the US and EU Before and During the Great Recession
Carbo-Valverde, Santiago - 2011
This paper models and estimates ex ante safety-net benefits at a sample of large banks in US and Europe during 2003-2008. Our results suggest that difficult-to-fail and unwind (DFU) banks enjoyed substantially higher ex ante benefits than other institutions. Safety-net benefits prove...
Persistent link: https://www.econbiz.de/10012461870
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The Evolution of the Financial Stability Mandate : From Its Origins to the Present Day
Toniolo, Gianni - 2015
We investigate the origins and growth of the Financial Stability Mandate (FSM) to examine why bank supervisors, inside and outside of central banks succeeded or failed to meet their FSM. Three issues inform this study: (1) what drives changes in the FSM, (2) whether supervision should be...
Persistent link: https://www.econbiz.de/10012457822
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Independent Regulators and Financial Stability : Evidence from Gubernatorial Campaigns and a Progressive Era Policy Experiment
Del Angel, Marco; Richardson, Gary - National Bureau of Economic Research - 2022
Regulatory independence forms a foundation for modern financial systems. To illuminate the value of this ubiquitous institution, we examine a Progressive Era policy experiment in which hitherto independent regulators came under gubernatorial supervision. After this change, failure rates declined...
Persistent link: https://www.econbiz.de/10013191033
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Regulation and Supervision : An Ethical Perspective
Kane, Edward J. - 2008
This essay shows that government credit-allocation schemes generate incentive conflicts that undermine the quality of bank supervision and eventually produce banking crisis. For political reasons, most countries establish a regulatory culture that embraces three economically contradictory...
Persistent link: https://www.econbiz.de/10012464752
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Liquidity Risk, Liquidity Creation and Financial Fragility : A Theory of Banking
Diamond, Douglas W. - 1999
Both investors and borrowers are concerned about liquidity. Investors desire liquidity because they are uncertain about when they will want to eliminate their holding of a financial asset. Borrowers are concerned about liquidity because they are uncertain about their ability to continue to...
Persistent link: https://www.econbiz.de/10012471328
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Let the Worst One Fail : A Credible Solution to the Too-Big-To-Fail Conundrum
Philippon, Thomas; Wang, Olivier - National Bureau of Economic Research - 2021
We study time-consistent bank resolution mechanisms. When interventions are ex post efficient, a government cannot commit not to inject capital into the banking system. Contrary to common wisdom, we show that the government may still avoid moral hazard and implement the first best allocation by...
Persistent link: https://www.econbiz.de/10012794588