Freixas, Xavier; Lóránth, Gyöngyi; Morrison, Alan D. - Department of Economics and Business, Universitat … - 2005
We investigate the optimal regulation of financial conglomerates which combine a bank and a non-bank financial institution. The conglomerate’s risk-taking incentives depend upon the level of market discipline it faces, which in turn is determined by the conglomerate’s liability strucure. We...