We study the political economy of bank capital regulation from a positive and normative perspective. In a general … politicians. We show that bankers and politicians agree on lobbying contributions and capital regulation that renders banks … capital regulation standards from international agreements eliminate lobbying incentives, yielding an efficient and fair …

-space approach of Arrow-Debreu. A host of new interesting economic issues emerge. First, risk averse agents can attempt to insure … an open question. Second, one may ask more specifically what is the role of social groups for risk sharing and risk … allocation when agents face idiosyncratic or aggregate risk. Third, does a suitable combination of social group formation and …

generations, even if the underlying productivity risk is small or zero. We conclude that a joint policy package of orderly default …