No abstract is available.

Against the backdrop of an integrating Europe, the debate on the need for European arrangements for financial supervision and stability is intensifying in the literature as well as in the policy arena. While there is a consensus that the need for European arrangements ultimately depends on the...

No Abstract is Available.

This paper examines the unfinished agenda of the governance structure for financial regulation and supervision in Europe. In this unfinished agenda, there are two opposite forces at play: one that fosters greater centralisation and another one that promotes decentralisation with co-operation. I...

No Abstract is Available.

This paper investigates whether monetary policy and banking supervision should be separated, or not. It starts with an account of the historical evolution of the Central Banks micro-function (banking supervision). The role of the lender of last resort and the introduction of deposit insurance is...

This paper analyses the incentives of the equityholders of a leveraged company to shut it down in a continuous time, stochastic environment. Keeping the firm as an ongoing concern has an option value but equity and debt holders value it differently. Equityholders decisions exhibit excessive...

In many long-term relationships, parties may be reluctant to reveal their private information in order to benefit from their informational advantage in the future. We point out that the strategic use of debt by an uninformed party induces another party to reveal private information. Our...

This paper studies the link between public trading and the activity of a firms large shareholder who can affect firm value. Public trading results in the formation of a stock price that is informative about the large shareholders activity. This increases the latters incentives to engage in value...

We provide a formal analysis of the notion that conglomerates are more ‘entrenched’ as they have ‘deeper pockets’. Using the financial contracting model of Bolton and Scharfstein (1990), we can isolate two effects that confirm this conjecture: the pooling of cash flows, which allows to...