Conventional wisdom contends that in order to assure financial stability, commercial banks require an elaborate federal regulatory and insurance structure and direct access to the central bank. Nonbank financial institutions apparently pose no threat and, therefore, merit less regulatory attention, no insurance, and no direct access to the central bank. Until relatively recently, the convention...

Using data for 1238 banks located in 94 developing and emerging countries, we explore whether the impact of bank regulation and supervision on banking risk (measured by the banks’ Z-scores) depends on bank structure. Our findings suggest that stricter regulation and supervision increases the banks’ Z-scores. Notably capital requirements and supervisory control diminish banking risk. However, th...

One of the key features of both the German and Japanese postwar political economies is a bank-based financial system. In the 1980s bank-based systems were widely perceived to be superior to market-based systems like the US and UK in their ability to provide long-term "patient" capital to industry. Since the early 1990s, however, the bank-based financial systems in both Japan and Germany have fa...

We analyze the effects of capital adequacy regulation on bank insolvency and aggregate investment. We show that while the risk of bank insolvency may be reduced there are economic costs arising from repercussions of regulation on aggregate economic activity. Solvency regulation restricts loan supply and has adverse effects on investment. Using a model of the banking system that is characterized...

Laraine Laudati for suggesting some of the legislative history and other citations and for providing legal insights important to this article.

Abstract Bank Resolution is considered a cornerstone of the post-crisis financial regulation; however, it also widely ineffective and inefficient in handling bank failures. This article analyses preventive potential resolution framework, specifically focusing on minimum requirement for own funds eligible liabilities (MREL). We argue that MREL has double nature. On one hand, should ensure feasib...

Is the bank holding company a vehicle that ought to be used for purposes of public policy to permit banking organizations to perform functions that ought not be performed by banks per se? Or is the bank holding company structure merely an entity with no social function an historical and political accident? The latter view seems to have pervailed in the deliberations of the Commission on Financi...

An overlapping generations model with two production factors and two types of agents is considered in presence of ...nancial intermediation. The research focuses at the analysis of the consequences of a suddain negative production shock on a ...nancial intermediation capacities and consequently on the economy as a whole. The model exhibits a property of the ”chain reaction” when a single macroe...