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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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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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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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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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Financial Innovation and the Management and Regulation of Financial Institutions
Merton, Robert C. - 2014
New security designs, improvements in computer telecommunications technology and advances in the theory of finance have …
Persistent link: https://www.econbiz.de/10012752889
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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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Beyond the Balance Sheet Model of Banking : Implications for Bank Regulation and Monetary Policy
Buchak, Greg - 2018
Bank balance sheet lending is commonly viewed as the predominant form of lending. We document and study two margins of adjustment that are usually absent from this view using microdata in the $10 trillion U.S. residential mortgage market. We first document the limits of the shadow bank...
Persistent link: https://www.econbiz.de/10012909515
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Sovereign Default Risk and Banks in a Monetary Union
Uhlig, Harald - 2013
This paper seeks to understand the interplay between banks, bank regulation, sovereign default risk and central bank … in other "safe" countries will impose tighter regulation. As a result, governments in risky countries get to borrow more …
Persistent link: https://www.econbiz.de/10013077642