efficient’. While Central Bank policy may have shifted radically now that stability is an explicit objective of policy, the same …

regulation is shown to operate at a collective level, regulating each bank as a function of both its joint (correlated) risk with … liability of banks and the presence of a negative externality of one bank’s failure on the health of other banks give rise to a … risk. Regulatory mechanisms such as bank closure policy and capital adequacy requirements that are commonly based only on a …

This paper seeks to understand the interplay between banks, bank regulation, sovereign default risk and central bank … guarantees in a monetary union. I assume that banks can use sovereign bonds for repurchase agreements with a common central bank … in other “safe” countries will impose tighter regulation. As a result, governments in risky countries get to borrow more …

factors: cross-border externalities from bank failures and heterogeneity in bank failure costs. Based on a simple model we …. We apply the insights of our model to discuss optimal supervisory arrangements for different regions of the world and …

A regulator resolving a bank faces two audiences: depositors, who may run if they believe the regulator will not …

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 …

of regulation only a gambling equilibrium will exist. In this case, either flat-rate capital requirements or binding …

We analyse the implications for the pricing of bank loans of the reform of capital regulation known as Basel II. We …-sensitive standardized approach of Basel II. We also show that only an extremely high social cost of bank failure might justify the proposed …