This paper uses branching and interstate banking deregulation as a natural experiment to explore the effect of agency cost on the use of bank loan commitments. A simple inventory-based model shows that lower agency cost facilitates more issuance of loan commitments because lower agency cost...

In the aftermath of the global financial collapse that began in 2007, governments around the world have responded with reform. The outlines of Basel III have been announced, although some have already dismissed its reform agenda as being too little (and too late!). Like the proposed reforms in...

At the time of publication, this article provided the most in-depth critique of capital account liberalization in any U.S. law journal. The article stemmed from a paper presented by the author to the Seventh Annual Conference of the United States-Mexico Law Institute in Santa Fe, New Mexico on...

This article offers a critique of the deregulation of banking and finance that started with the breakdown of the Bretton Woods regime of fixed exchange rates during the Nixon administration, accelerated with interest rate deregulation during the Carter administration, and was deepened during the...

In the aftermath of the global financial collapse that began in 2007, governments around the world have responded with reform. The outlines of Basel III have been announced, although some have already dismissed its reform agenda as being too little (and too late!). Like the proposed reforms in...

The neoclassical approach focuses its attention on the prudence of individual banks. In its objective of achieving allocative efficiency, it seeks to prevent market failures caused by the operations of the banks. In this light, it is contended that China should further its market reforms in the...

We show that the regulation of bank lending practices is necessary for the optimal provision of private liquidity. In an environment in which bankers cannot commit to repay their creditors, we show that neither an unregulated banking system nor narrow banking can provide the socially efficient...

Recent events have made it clear that the deposit insurance system is broken. We have a de jure cap on insurance set at $250,000 but, de facto, for any bank with at least $100 billion in assets, uninsured depositors are very unlikely to take losses. It is time for Congress to advance legislation...

Before we can reform the financial system, we need to understand what banks do; or, better, what banks should do. This paper will examine the later work of Hyman Minsky at the Levy Institute, on his project titled “Reconstituting the United States’ Financial Structure.” This led to a...