competition and stability in banking. There are two basic channels through which competition may increase instability: by … incentives to take risk and raise failure probabilities. The competition-stability trade-off is characterized and the … implications of the analysis for regulation and competition policy are derived. It is found that optimal regulation may depend on …

developed considering this new paradigm and discuss how institutional features relating to bank closure policy influences lender …

ratio) and size (TBA) of the industry are linked to lower sovereign risk in general. Foreign bank penetration and … competition (a more diversified structure of the industry) are linked to lower sovereign risk. Our results also support the wake …

failures. In this model, there is no trade-off between bank competition and financial stability … mechanisms for bank risk-taking studied in a large partial equilibrium literature. We show that competitive equilibriums maximize … banks is higher than that of banks enjoying monopoly rents, and is robust to the introduction of social costs of bank …

III rules, thus suggesting a ‘race to the top' in capital standards. We study regulatory competition when banks are … coordinated ones when governments care equally about bank profits, taxpayers, and consumers …

Most theoretical central bank models use short horizons and focus on a single tradeoff. However, in reality central … bankruptcy. We term these factors discipline and stability effects, respectively. The central bank's welfare decreases with …

systemically important financial institutions. We propose a bank default risk model, in the vein of the classic Merton-type, which …

clearing house (bank) which monitors agents and enforces contracts. Our model develops a concept of bankruptcy equilibrium that …