In the recent financial crisis, risk management tools have been proven inadequate. Model risk, a key component of bank … the bank has to incentivize an agent to perform innovative improvement in the risk model technology. …

“Too-Big-to-Fail” is a legitimate trepidation from a macro-prudential perspective of bank regulation. In addition to … simultaneous bank failure; (ii) assess the liability of individual financial institutions to the financial system; and, (iii … crisis that led to instances of heightened systemic risk. Furthermore, I evaluate the current themes in regulation, in order …

We model dynamic bank capital structure under three optimally-designed regulatory regimes dealing with potential …