The banking sector is one of the most highly regulated sectors in the economy. However,in contrast to other regulated sectors there is no wide agreement on the market failuresthat justify regulation. We suggest that there are two important ones. The first is a coordination problem that arises...

We provide a comprehensive review of China's financial system, and explore directions of future development. First, the current financial system is dominated by a large banking sector. In recent years banks have made considerable progress in reducing the amount of non-performing loans and...

The extraordinary economic performance of China and India in recent decades raises questions about the conventional wisdom of using the legal system as the basis of commerce. Despite many well-known advantages, the legal system can be captured by interest groups and become a barrier to change....

Modern financial systems exhibit a high degree of interdependence. There are different possible sources of connections between financial institutions, stemming from both the asset and the liability side of their balance sheet. For instance, banks are directly connected through mutual exposures...

Historically, much of the banking regulation that was put in place was designed to reduce systemic risk. In many countries capital regulation in the form of the Basel agreements is currently one of the most important measures to reduce systemic risk. In recent years there has been considerable...

In this paper we study the intra-group transactions between the parent bank and its foreign subsidiaries in European Union countries during the crisis. We use hand-collected data from annual statements on related party transaction and find that they may create a serious problem for the stability...

We examine whether foreign-owned and government-owned banks in Central and Eastern Europe reacted differently during a domestic systematic banking crisis and the global financial crisis of 2008. Our panel dataset comprises data on more than 400 banks for the period 1994-2010. Our analysis shows...