Christensen, Ian; Meh, Césaire Assah; Moran, Kevin - 2011
This paper assesses the merits of countercyclical bank balance sheet regulation for the stabilization of financial and … equilibrium model with banks and bank capital, in which bank capital solves an asymmetric information problem between banks and …, though banks do not internalize this impact. Regulation, in the form of a constraint on bank leverage, can mitigate the …