implemented) can change the bank's incentives so that runs are less likely. Optimal regulation would not mimic these rules …We study a modification of the Diamond and Dybvig (1983) model in which the bank may hold a liquid asset, some … depositors see sunspots that could lead them to run, and all depositors have incomplete information about the bank's ability to …

Limited liability and asymmetric information between an investment bank and its lenders provide an incentive for a bank … imposed solvency constraints on banks. However, these constraints may not survive in systems competition, as systems … competition is likely to suffer from the same type of information asymmetry which induced the private market failure and which …

bank risk taking, commercial bank failure, interest rates on loans, and market structure. We propose a market structure … addition to aggregate shocks to the fraction of performing loans in their portfolio. A nontrivial bank size distribution arises … consistent with untargeted business cycle properties, the bank lending channel, and empirical studies of the role of …

Although nation-based systems of financial regulation constitute a second-best approach to global welfare maximization …

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 …

Now in prospect is a major revision of international bank capital regulations that would embody recent advances in … increase in bank failure rates over time …

macroeconomic and bank regulatory reform. Bank regulatory policy promoted privatization, financial liberalization, and free entry …. Argentina's bank regulatory system now is widely regarded as one of the two or three most successful among emerging market … discipline has played an important role in prudential regulation by encouraging proper risk management by banks. There is …

their investors. We show the bank has to have a fragile capital structure, subject to bank runs, in order to perform these … functions. Far from being an aberration to be regulated away, the funding of illiquid loans by a bank with volatile demand … such as narrow banking and bank capital requirements …