Closure Policy when Bank Inspection Can Be Manipulated
نویسنده
چکیده
This paper analyzes inspection and closure policies of a bank, and the strategic reaction of its managers/shareholders when they can (costly) manipulate the information available to the regulator. We derive optimal intervention policy, and analyze its effect on managerial strategies. Regulatory intervention may induce shareholders to manipulate the information available to the regulator in order to avoid intervention and closure, and we find that these incentives to manipulate information may increase with tighter capital requirements. Finally we show that, in order to avoid manipulation by the banker, some degree of forbearance in closure may be ex ante optimal.
منابع مشابه
Monetary and Macro-prudential Policies: An Integrated Analysis
This paper studies the interaction between monetary and macro-prudential policies in a simple model with both nominal and financial frictions. The nominal friction gives rise to a conventional monetary policy objective emphasized in the New Keynesian literature. The financial friction, in the form of an occasionally binding collateral constraint, gives rise to a financial stability objective. ...
متن کاملA Chance Constrained Model for a Two Units Series Critical System Suffering From Continuous Deterioration
In this paper we focus on a continuously deteriorating two units series equipment which its failure can not be measured by cost criterion. For these types of systems avoiding failure during the actual operation of the system is extremely important. In this paper we determine inspection periods and maintenance policy in such a way that failure probability is limited to a pre-specified value and ...
متن کاملInvestigating the asymmetric impact of monetary shocks on bank credits during business periods: (Serious Keynesian Perspective Test)
Monetary policy is one way of controlling economic fluctuations, and in recent years, developing countries (including Iran) have been particularly concerned with policymaking. For this reason, it is necessary to consider how these policies will affect the Iranian economy and its variables. It should also be examined whether the existence of inflationary conditions in the Iranian economy can hav...
متن کاملA Study on the Effect of Granular Residual in the Banking Network on the Transmission of Monetary Policy through Lending Channel
Granular residual is created in the banking network when there are a few large banks with many small banks. In this case, the effect of the shocks on each bank not lost in total that can lead to macro-economic consequences. The transmission of monetary policy through change in bank facilities is one of the key mechanisms affecting monetary policies. The power of transmission of monetary policy ...
متن کاملارزیابی راهبردهای پولی بانک مرکزی ایران نسبت به شکاف تولید و انحراف تورم: رویکرد بوت_استرپ
Monetary policy is one of the most important macroeconomic policies which could be used for achieving economic targets such as reducing the output gap and reducing the inflation's deviation from it's target level. These policies can be implemented through the control of volume of money or the rate of interest. Based on economic theories, the Central Bank should conduct monetary policies w...
متن کامل