This study discusses the effects of financial intermediation, banks’ moral hazard and monitoring on monetary policy … transmission in a simple model where borrowers are dependent on loans granted by banks with superior monitoring skills. As distinct … for their special role in the monetary transmission. Instead, we focus on banks’ role in monitoring their loan customers …

supplied by investors who relay on public information can be the source of endogenous business fluctuations. Monitoring helps … induce monitoring –which is also non-contractible – are weaker the lower is the return to investment. If the return to … monitoring and of entrepreneurial effort. Under decreasing marginal returns to capital, the model generates a reversion mechanism …

choose between two equally efficient verification procedures: monitoring and auditing. Under auditing the principal receives … for verification. Auditing exacerbates this tension and, consequently, requires steeper incentive schemes than monitoring … choose between two equally efficient verification procedures: monitoring and auditing. Under auditing the principal receives …

-ante regime of policy intervention involving conditional monitoring can prevent bank crises. …

the presence of costly government resources and convex effort costs, teacher monitoring - which is wasteful in principle … shown to make the case for monitoring activity instead of incentive pay even stronger. …