Federal regulators characterize capital forbearance as an efficient way of nursing weak banks and thrifts back to health. An alternative hypothesis is that forbearance reflects inefficient costs of agency that fall on federal deposit-insurance funds. Divergences between regulatory measures of a...

This study extends the framework of Brennan (1986) to find the cost-minimizing combination of spot limits, futures limits, and margins for stock and index futures in the Taiwan market. Our empirical results show that the cost-minimization combination of margins, spot price limits, and futures...