Optimality of Prompt Corrective Action in a Continuous-Time Model with Recapitalization Possibility
نویسندگان
چکیده
منابع مشابه
Banking Regulation and Prompt Corrective Action
We explore the rationale for regulatory rules that prohibit banks from developing some of their natural activities when their capital level is low, as epitomized by the US Prompt Corrective Action (PCA). This paper is built on two insights. First, in a moral hazard setting, capital requirement regulation may force banks to hold a large fraction of safe assets which, in turn, may lower their inc...
متن کاملForbearance and prompt corrective action - May 2005
This paper investigates whether a bank regulator should terminate problem banks promptly or exercise forbearance. We construct a dynamic model economy in which entrepreneurs pledge collateral, borrow from banks, and invest in long-term projects. We assume that collateral value has aggregate risk over time, that in any period entrepreneurs can abscond with the projects but losing the collateral,...
متن کاملA MODEL FOR MIXED CONTINUOUS AND DISCRETE RESPONSES WITH POSSIBILITY OF MISSING RESPONSES
A model for missing data in mixed binary and continuous responses, which can be used on cross-sectional data, is presented. In this model response indicator for the binary response can be dependent on the continuous response. A closed form for the likelihood is found. For data with a complicated pattern of missing responses some new residuals are also proposed. The model of multiplicative heter...
متن کاملThe Effects of Legislating Prompt Corrective Action on the Bank Insurance Fund
I HE FEDERAL DEPOSIT lnsur-ance Corporation Improvement Act of 1991 (hereafter, FDICIA) authorized more federal government funds for the Federal Deposit Insurance Corporation and made major changes in the supervision and regulation of depository institutions. One section of FDICIA requires supervisors to take prompt corrective action when an institution’s capital ratio falls below the required ...
متن کاملA continuous time neural model for sequential action : Supplemental Information ∗
The Leabra framework is described in detail in O’Reilly and Munakata (2000); O’Reilly, Munakata, Frank, Hazy, and Contributors (2013) and O’Reilly (2001), and summarized here. The standard Leabra equations have been used to simulate over 40 different models in O’Reilly and Munakata (2000) and a number of other research models. Thus, the model can be viewed as an instantiation of a systematic mo...
متن کاملذخیره در منابع من
با ذخیره ی این منبع در منابع من، دسترسی به آن را برای استفاده های بعدی آسان تر کنید
ژورنال
عنوان ژورنال: SSRN Electronic Journal
سال: 2009
ISSN: 1556-5068
DOI: 10.2139/ssrn.1102590