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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/10012464752
efficiently with cross-border issues. To track and control insolvency risk within and across any set of countries, officials must …
Persistent link: https://www.econbiz.de/10012466806
As financial institutions and markets transact more and more cross-border business, gaps and flaws in national safety nets become more consequential. Because citizens of host (home) countries may be made to pay for mistakes made in the home (host) country, Basel's lead-regulator paradigm...
Persistent link: https://www.econbiz.de/10012466813
We examine whether examiners were informed and contributed to the health of the banking sector. Information included quantitative information that was eventually made public, quantitative information that remained private, and subjective information dependent on the examiner's production of...
Persistent link: https://www.econbiz.de/10012453254
This paper supplies an agency-cost and contestable-markets perspective on the financial policies that triggered the Asian financial crisis. The agency-cost analysis hypothesizes that individual-country regulators knew that politically directed loans had made their banks insolvent, but...
Persistent link: https://www.econbiz.de/10012471262