The Prudential Regulation of Banks
| Author | : | |
| Rating | : | 4.62 (695 Votes) |
| Asin | : | 0262041464 |
| Format Type | : | paperback |
| Number of Pages | : | 276 Pages |
| Publish Date | : | 2014-04-17 |
| Language | : | English |
DESCRIPTION:
Mathias Dewatripont is Professor at the Université Libre de Bruxelles, a Research Fellow at its European Centre for Adanced Research in Economics and Statistics (ECARES) and Research Director of the London-based Centre for Economic Policy Research (CEPR).Jean Tirole is Scientific Director of IDEI (Institut d'Economie Industriell
Dewatripont and Tirole tackle the key problem of providing the right incentives to management in banks by looking at how external intervention by claimholders (holders of equity or debt) affects managerial incentives and how that intervention might ideally be implemented. Observing that the main concern of the regulation of intermediaries is solvency (the relation between equity, debt, and asset riskiness), the authors provide institutional background and develop a case for regulation as performing the monitoring functions (screening, auditing, convenant writing, and intervention) that dispersed depositors are unable or unwilling to perform. They explain how regulation can be designed to minimize risks of accounting manipulations and to insulate bank managers from macroeconomic shocks, which are beyond their control. They also illustrate the dangers of regulatory failure in a summary of the S&L crisis of the 1980s. Following a survey of banking theory, Dewatripont and Tirole develop their model of the capital structure of banks and show how optimal regulation can be achieved using capital adequacy requirements and external intervention when banks are violated. Their primary focus is the regulation of comme
a handy guide book to study banks' corporate governance ytakami@po.infosphere.or.jp This book is useful both for economic and legal analysis of financial institutions. It provides a plausible model to explain the corporate mechanism of a commercial bank, taking into account shareholders', lenders' (depositors'), and regulators' incentives. Although it does not provide any analysis of statutes or codes of banking laws, the model is simple enough to consider any rules in banking industry, from law and economics point of view, both domestic and international. It also provides brief analysis of specific finan
Language Notes Text: English (translation) Original Language: French