Franchise Values, Regulatory Monitoring, and Capital Requirements in Optimal Bank Regulation

Publikation: Bidrag til tidsskriftTidsskriftartikelfagfællebedømt

  • Thomas Barnebeck Andersen
  • Thomas Harr
This paper demonstrates that financial deregulation is likely to make standard prudential regulatory instruments less effective in curbing excessive risk-taking incentives among banks. This has interesting implications for optimal bank regulation. When there is an increase in competition, the optimal capital requirement should increase, whereas regulatory auditing should decrease. In contrast, when there is an increase in gambling yields, auditing should always increase, whereas the optimal capital requirement may increase or decrease.
OriginalsprogEngelsk
TidsskriftJournal of Emerging Market Finance
Vol/bind7
Udgave nummer1
Sider (fra-til)81-101
Antal sider21
ISSN0972-6527
DOI
StatusUdgivet - 2008

Bibliografisk note

JEL Classification: G2, L5

ID: 4711305