In this report a stochastic general equilibrium model is developed, which is intended for monetary policy analysis on a EU-level. The focus is on two central elements. First, liquidity effects of monetary policy are studied in the model. It appears that not only frictions on the credit markets,...

This study considers the optimal regulation of a single bank that has private information on the intrinsic quality of its loan portfolio (adverse selection) and where the bank's choice of effort to improve this quality cannot be observed by the banking regulator (moral hazard). In designing...

In a dynamic framework banks compete for customers by setting lending conditions for the loans they supply, taking into account the capital adequacy requirements posed by the regulator. By easing its lending conditions a bank faces a tradeoff between attracting more demand for loans, thus making...

In a dynamic framework banks compete for customers by setting lending conditions for the loans they supply, taking into account the capital adequacy requirements posed by the regulator. By easing its lend- ing conditions a bank faces a tradeoff between attracting more demand for loans, thus...

This study focuses on Dutch shareholders' structures and the participation by funds and banks in particular. Statistics show that foreigners possess the main part of Dutch shares, funds a relatively large part and banks only a small part. In the Netherlands there has been an increasing interest...

In this report a formal game-theoretic framework is presented to analyse the effects of the Stability Pact on monetary policy in the EMU. First, the model shows that high deficits and government debt lead to excessive inflation, causing a rise in interest rates. Second, the analysis confirms the...

Under the new Basle Capital Accords, regulation takes the form of a contingency rule prescribing a certain level of bank capital contingent on the bank's risk taking behaviour in choosing its asset portfolio. In a simple dynamic model of banking with binding regulation we show that such Basle II...

This report reviews Thomas J. Sargents essay 'The Conquest of American Inflation' (1999). Sargent searches for a model which can explain postwar US inflation and which may shed light on the dynamic forces which drive this pattern. Following Sargent, the conquest of US inflation is due to a...

In this paper we present a theoretic framework to analyse pricing structures in debit card schemes. Card-holders value debit cards only to the extent that these are accepted by retailers, while retailers in turn benefit from a widespread usage of cards. This points to the two-sided nature of the...