We propose a model where systemic and non-systemic banks are exposed to liquidity shortfalls so that a lender of last resort policy is required. We find that it is socially optimal to override the decision of the central bank by the unconditional provision of liquidity support when the shortfall...

We analyze the impact of bank competition on the equilibrium quality of loans in a formal model where banks do not observe the type of loan applicants, i.e. face an adverse selection problem, nor borrowers’ effort, i.e. also face a moral hazard problem. The main finding is that there exists an...

This stimulating and original Handbook offers an updated and systematic discussion of the relationship between central banks, financial regulation and supervision after the global financial crisis.

This paper presents a formal model of a credit rating agency. I study the consequences of the transition from an “investor-pays” model to an “issuer-pays” model on the quality standard of credit ratings chosen by the agency. I find that such a transition is likely to generate a...

The Northern Rock bailout has raised concerns about the ability of current supervisory arrangements to deal with banking crises. This paper uses a formal model of a lender of last resort to derive policy implications regarding the optimal allocation of decision-making authority. Thereby, it...

We analyze whether banking supervision responsibilities should be concentrated in the hands of a single supervisor. We find that splitting supervisory powers among different supervisors is a superior arrangement in terms of social welfare to concentrating them in a single supervisor when the...

Mechanisms for sharing the common tariff revenue in a customs union have received little attention in the literature (Syropoulus, 2003). Comparative analyses show that in past and current customs unions two main mechanisms are been used: generals rules and common funds. In this paper, a new...

El trabajo analiza el proceso de reforma en los servicios públicos a la luz del modelo desarrollado por Spiller y Tomassi (2003). El modelo desataca la incidencia que las instituciones políticas tienen en el proceso político, las que se plasman en ciertas características externas de las...

In this paper we analyze the individual motivation to pay taxes from a novel perspective: the degree of tax morale. We use the Latinobarometro data set of 2005 for countries belonging to the Cono Sur area in Latin America. We estimate, through OLS and ordered probit regressions, the relationship...