Contents: 1. Introduction By Charles A. E. Goodhart and Dimitrios P. Tsomocos -- 2. "Principles for Macroprudential Regulation", (A.K. Kashyap, D.P. Tsomocos and A.P. Vardoulakis), Banque de France Financial Stability Review, No.18, pp. 173-182, April -- 3. "The Macroprudential Toolkit", (R....

The maintenance of financial stability is a key objective of monetary policy, but the record of regulators in achieving this has been lamentable in recent years. This failure has been matched by an equivalent inability to establish an appropriate theoretical basis for financial regulation. In...

The achievement of financial stability is one of the most pressing issues today. This timely and innovative book provides an analytical framework to assess financial (in)stability as an equilibrium phenomenon compatible with the orderly functioning of a modern market economy. The authors...

We modify the Diamond and Dybvig (1983) model of banking to jointly study various regulations in the presence of credit and run risk. Banks choose between liquid and illiquid assets on the asset side, and between deposits and equity on the liability side. The endogenously determined asset...