investors and of speculators, the reaction of the official sector (including the multilaterals), capital controls, bank …

This paper illustrates the paradox of prudential under-regulation in an economy that adopts financial reform, a reform … probability of the crisis is updated sequentially applying Bayesian inference. Costly regulation can mitigate the probability of … the crisis. We identify conditions where the regulation level supported by the majority is positive after the reform, but …

This paper illustrates the paradox of prudential under-regulation in an economy that adopts financial reform, a reform … probability of the crisis is updated sequentially applying Bayesian inference. Costly regulation can mitigate the probability of … the crisis. We identify conditions where the regulation level supported by the majority is positive after the reform, but …