How Offshore Financial Competition Disciplines Exit Resistance by Incentive-Conflicted Bank Regulators
AbstractThis paper studies the impact of technological change and regulatory competition on governmental efforts to generate rents for banks in two stylized regulatory environments. In the first environment, incentive-conflicted regulators attempt to create rents by restricting the size and scope of individual banking organizations. In the second, rents come from efforts to supply deposit guarantees to troubled banks. In both cases, innovations in financial technology and in competing domestic and offshore regulatory arrangements make the costs of delivering rents to banks more transparent to taxpayers and encourage customers to push rent-dependent banking systems into crisis. This analysis portrays the banking crises that have roiled world markets in recent years as information-producing events that identify and discredit inefficient strategies of regulating banking markets.
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Bibliographic InfoArticle provided by Springer in its journal Journal of Financial Services Research.
Volume (Year): 16 (1999)
Issue (Month): 2 (December)
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Web page: http://www.springerlink.com/link.asp?id=102934
regulatory competition; banking crises; incentive conflict in government;
Other versions of this item:
- Edward J. Kane, 1999. "How Offshore Financial Competition Disciplines Exit Resistence by Incentive-Conflicted Bank Regulators," NBER Working Papers 7156, National Bureau of Economic Research, Inc.
- G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
- G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation
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