competitive environment affect bank monitoring choices and the effectiveness of capital regulation? Our approach deviates from the …We assess the influence of competition and capital regulation on the stability of the banking system. We particularly … ask two questions: i) how does capital regulation affect (endogenous) entry; and ii) how do (exogenous) changes in the …

bank supervision and eventually produce banking crisis. For political reasons, most countries establish a regulatory …"This essay shows that government credit-allocation schemes generate incentive conflicts that undermine the quality of … culture that embraces three economically contradictory elements: politically directed subsidies to selected bank borrowers …

presence of supervision by bank regulators. The model uses a principal-agent setting between a bank's owner and its risk … standard approach subsequent to becoming regulated, i.e., the presence of regulation may induce a bank to decrease the quality … internal rating based approach. The paper considers how a bank's preference for a risk management system is affected by the …

How do near-zero interest rates affect bank competition, risk taking and regulation? I study these questions in a … insurance may induce excessive risk taking. The zero lower bound on deposit rates (ZLB) distorts bank competition and boosts … risk shifting incentives, particularly if rates are expected to remain near-zero for long. At the ZLB, capital regulation …