The paper discusses key elements of optimal central bank design and applies its findings to the Eurosystem. A …

(MPC). In our framework, central bank conservatism is required to attenuate the volatility of monetary decisions generated … extra central bank conservatism is required when there is ambiguity about the MPC's true decision rule. …

the public, long-term systemic risk among banks tends to increase. From the dynamic perspective, bank penalties represent … long-term. In this respect, bank penalties resemble still waters that run deep. In contrast, a settlement with regulatory …

This study is an empirical investigation of theoretical predictions concerning the impact of bank competition on bank … banking increases, the loan-to-asset ratio will rise (under reasonable assumptions), but the probability of bank failure can … either increase or decrease. However, the probability of bank failure will fall if and only if borrowers' response to take on …

incentives to implement such a trigger? We construct a theoretical model of a bank that is financed with debt and equity, and a … bank manager monitoring the bank’s loan portfolio. The manager must be incentivized to warn the board before a crisis …

use the model to look at monetary policy and show that allowing banks to sell long-term assets to the central bank after a … ; bank portfolio …