The coincidence of the rise of this new financial system and the current financial crisis has naturally led to a great deal of fascinating research on the links between competition, stability, and efficiency in the financial sector. In this seminar we aim to take stock of this research effort,...

Financial regulation is usually justified by pointing to market imperfections that regulation seeks to address. Yet all real-world markets are imperfect and the welfare costs arising from these imperfections create strong incentives for market participants to devise their own solutions....