Bank regulation used to be riddled with price, product, entry, and location restrictions. These restrictions were intended to prevent the recurrence of crises, such as those of the 1930s and 1940s. Over time, however, regulatory acquiescence to technological and institutional innovation...

This paper assesses the integration strategy of the European Union in regulated network markets. The paper argues that in these markets integration should not be an end in itself. In regulated markets the conventional gains from trade or freedom of establishment may be outweighed by significant...

An important question in banking is how strict supervision affects bank lending and in turn local business activity. Supervisors forcing banks to recognize losses could choke off lending and amplify local economic woes. But stricter supervision could also change how banks assess and manage...

Minimum capital requirement regulation forces banks to refund a substantial amount of their investments with equity. This creates a buffer against losses, but also in- creases the cost of funding. If higher refunding costs translate into higher loan interest rates, then borrowers are likely to...

In Germany a public discussion on the power of banks has been going on for decades now with the term power having at least two meanings. On the one hand, it denotes the power of banks to control public corporations through direct shareholdings or the exercise of proxy votes this is the power of...

We assess the influence of competition and capital regulation on the stability of the banking system. We particularly ask two questions: i) how does capital regulation affect (endogenous) entry; and ii) how do (exogenous) changes in the competitive environment affect bank monitoring choices and...

The European Regulation on short selling (SSR) has been applied to restrict hedge funds from short selling the stock of Monte dei Paschi di Siena (MPS) as part of a distressed securities strategy. In the MPS case, a distressed securities strategy was carried out based on short selling, despite...

We document empirical support for a key micro-level channel --- innovation by young, private firms --- through which financial sector deregulation affects economic growth. We find that intrastate banking deregulation, which increased the local market power of banks, decreased the level and risk...