With the advent of globalization, economic and financial interactions among countries have become widespread. Given technological advancements, the factors of production can no longer be considered to be just labor and capital. In the pursuit of economic growth, every country has sensibly...

The degree of risk taking by a bank is related to the size of the gross subsidy that has been extended to the bank by the safety net. This subsidy can be calculated by applying a technique that models deposit insurance as a put option on the bank's assets