on the FSB TBTF reforms for banks and its operationalisation in the Basel framework at the global level and in the …

Dealer banks--that is, large banks that deal in securities and derivatives, such as J. P. Morgan and Goldman Sachs …--are of a size and complexity that sharply distinguish them from typical commercial banks. When they fail, as we saw in the … global financial crisis, they pose significant risks to our financial system and the world economy. How Big Banks Fail and …

Using a simple symmetric principal-agent model of two banks, this paper studies the effects of both bailouts and bonus … generates incentives for herding and collective moral hazard. If banks can anticipate bailouts, they can coordinate on … equilibrium with high risk-taking of both banks. In preventing market failure due to banks collective moral hazard, bonus taxation …