In this essay, we analyze the impact of the capital and liquidity regulations and call attention to the fact that the banks' responses might create unintended evil: a reduced supply of bank loans, incentives to securitize assets, and adverse incentives on bank risk monitoring.The conclusion is...

More stringent regulations on bank capital, liquidity and corporate structure have been passed to increase the resilience of the global banking system. In this essay, we analyze the impact of these regulations and call attention to the fact that the banks' responses might create unintended evil:...

As a result of the global financial crisis, more stringent regulations on bank capital, liquidity and corporate structure have been passed. In this essay, we analyze the impact of these regulations and call attention to the fact that the dynamic responses by financial institutions might create...

After a brief review of the origin of the subprime crisis, we argue that the set of reforms proposed recently by national and international groups to reduce the risk of global banking crises constitutes an incomplete reform agenda. Three important issues remain, in our opinion, to be addressed...