This paper builds on contributions to a Conference on Benefit-Cost Analysis of Financial Regulation, held at the University of Chicago, to show how benefit-cost analysis (BCA) of financial regulations should be conducted. Our major themes are that (1) on theoretical grounds, BCA should be easier...

During the height of the financial crisis in 2008 and 2009, the government bailed out numerous corporations, including banks, investment banks, and automobile manufacturers. While the bailouts helped end the financial crisis, they were intensely controversial at the time, and were marred by the...

Minimum capital regulations play a central role in banking regulation. Regulators require banks to maintain capital above a certain level in order to correct incentives to make excessively risky loans and investments. However, it has never been clear how regulators determine how high or low the...

This paper builds on contributions to a Conference on Benefit-Cost Analysis of Financial Regulation, held at the University of Chicago, to show how benefit-cost analysis (BCA) of financial regulations should be conducted. Our major themes are that (1) on theoretical grounds, BCA should be easier...

Calls for benefit-cost analysis in rule-making based on the Dodd-Frank Wall Street Reform Act have revealed a paucity of work on allocative efficiency in financial markets. We propose three principles to help fill this gap. First, we highlight the need to quantify the "statistical cost of a...