Optimal Prudential Regulation of Banks and the Political Economy of Supervision
Optimal Prudential Regulation of Banks and the Political Economy of Supervision
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Publisher
International Monetary Fund
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Language
English
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Publisher
International Monetary Fund
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Scope and Contents
Contents
We consider a moral hazard economy in banks and production to study how incentives for risk taking are affected by the quality of supervision. We show that low interest rates may generate excessive risk taking. Because of a pecuniary externality, the market equilibrium may not be optimal and there is a need for prudential regulation. We show that t...
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Full title
Optimal Prudential Regulation of Banks and the Political Economy of Supervision
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TN_cdi_gale_infotraccpiq_382243802
Permalink
https://devfeature-collection.sl.nsw.gov.au/record/TN_cdi_gale_infotraccpiq_382243802
Other Identifiers
ISSN
1018-5941
DOI
10.5089/9781498338554.001
