We provide a framework to study bail-in regimes for banks. In the presence of a monitoring problem, the optimal bank capital structure combines standard debt, which liquidates the bank and provides strong monitoring incentives, and bail-in debt, which recapitalizes the bank but provides weaker...

We study financial regulation when some financial institutions or capital flows are unregulated and there are pecuniary externalities. Optimal financial regulation is scaled by a ``regulatory arbitrage multiplier.'' The contribution of an unregulated actor to regulatory arbitrage can be...

In this paper we examine the quantitative effects of margin regulation on volatility in asset markets. We consider a general equilibrium in finite-horizon economy with heterogeneous agents and collateral constraints. There are two assets in the economy which can be used as collateral for...

In this paper we examine the quantitative effects of margin regulation on volatility in asset markets. We consider a general equilibrium infinite-horizon economy with heterogeneous agents and collateral constraints. There are two assets in the economy which can be used as collateral for...