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Ethical Foundations of Financial Regulation
Kane, Edward J. - 2008
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/10012774887
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Durable Financial Regulation : Monitoring Financial Instruments as a Counterpart to Regulating Financial Institutions
Nakamura, Leonard I. - 2011
This paper sets forth a discussion framework for the information requirements of systemic financial regulation. It …
Persistent link: https://www.econbiz.de/10013125587
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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/10012772313
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Liquidity Risk, Liquidity Creation and Financial Fragility : A Theory of Banking
Diamond, Douglas W. - 2010
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/10012763345
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Confronting Divergent Interests in Cross-Country Regulatory Arrangements
Kane, Edward J. - 2021
Although nation-based systems of financial regulation constitute a second-best approach to global welfare maximization …
Persistent link: https://www.econbiz.de/10013225171
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Liquidity Requirements, Liquidity Choice and Financial Stability
Diamond, Douglas W. - 2016
assets to survive runs. Regulation similar to the liquidity coverage ratio and the net stable funding ratio (that are soon be … implemented) can change the bank's incentives so that runs are less likely. Optimal regulation would not mimic these rules …
Persistent link: https://www.econbiz.de/10012997373
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Capital Requirements in a Quantitative Model of Banking Industry Dynamics
Corbae, Dean; D'Erasmo, Pablo - 2021
We develop a model of banking industry dynamics to study the quantitative impact of capital requirements on equilibrium bank risk taking, commercial bank failure, interest rates on loans, and market structure. We propose a market structure where big banks with market power interact with small,...
Persistent link: https://www.econbiz.de/10013310583
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Insurance, Self-Protection, and the Economics of Terrorism
Lakdawalla, Darius N. - 2010
This paper investigates the rationale for government intervention in the market for terrorism insurance, focusing on … rational terrorists. Government subsidies for terror insurance can discourage self-protection and limit the inefficiencies …
Persistent link: https://www.econbiz.de/10012762980
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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/10013130253
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The Lessons from the Banking Panics in the United States in the 1930s for the Financial Crisis of 2007-2008
Bordo, Michael D. - 2011
In this paper we revisit the debate over the role of the banking panics in 1930-33 in precipitating the Great Contraction. The issue hinges over whether the panics were illiquidity shocks and hence in support of Friedman and Schwartz (1963) greatly exacerbated the recession which had begun in...
Persistent link: https://www.econbiz.de/10013132917