When designing incentives for a manager, the trade-off between insurance and a "good" allocation of effort across various tasks is often identified with a trade-off between the responsiveness (sensitivity, precision, signal-noise ratio) of the performance measure and its similarity (congruity,...

We examine a situation where efforts on different tasks positively affect production but are not separately verifiable and where the manager (principal) and the worker (agent) have different ideas about how production should be carried out: agents prefer a less efficient way of production. We...

As the European Reporting Framework (ERF): Key facts and information1 report has recognised, some countries have already implemented integrated "statistical" and supervisory reporting requirements at a granular level. Croatia is one of these countries. Moreover, Croatia has been able to produce...

Financial intermediaries may increase economic efficiency through intertemporal risk smoothing. However without an adequate regulation, intermediation may fail to do this. This paper studies the effects of a production shock in a closed economy and compares abilities of market-based and...

Banking regulators often practice forbearance and ambiguity in insolvency resolutions. The paper examines the effects of regulatory forbearance and ambiguity in a context of allocational efficiency. Bailouts, liquidations and their stochastic policy mix lead to suboptimal allocations if banks do...

In carrying out its banking supervision tasks as part of the Single Supervisory Mechanism (SSM), the European Central Bank (ECB) collects and disseminates data on significant and less significant institutions. To ensure harmonised supervisory reporting standards, the data are represented through...