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Allocating bank regulatory powers: lender of last resort, deposit insurance and supervision

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  • Charles M. Kahn

    (University of Illinois at Urbana-Champaign - Department of Finance)

  • João A. C. Santos

    (Federal Reserve Bank of New York)

Abstract

Bank regulation in most countries encompasses a lender of last resort, deposit insurance and supervision. These functions are interrelated and therefore require coordination among the authorities responsible for them. These authorities, however, are often established with different mandates, some of which are likely to be in conflict. We consider these issues by studying the optimal institutional allocation of such functions.

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Bibliographic Info

Paper provided by Bank for International Settlements in its series BIS Working Papers with number 102.

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Length: 46 pages
Date of creation: Aug 2001
Date of revision:
Handle: RePEc:bis:biswps:102

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References

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  1. George J. Mailath & Loretta J. Mester, 1993. "A positive analysis of bank closure," Working Papers 94-2, Federal Reserve Bank of Philadelphia.
  2. Yuk-Shee Chan & Stuart I. Greenbaum & Anjan V. Thakor, 2004. "Is Fairly Priced Deposit Insurance Possible?," Finance 0411018, EconWPA.
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  12. Fries,S. & Mella-Barral,P. & Perraudin,W.R.M., 1995. "Optimal Bank Reorganisation and the Fair Pricing of Deposit Garantees," Cambridge Working Papers in Economics 9417, Faculty of Economics, University of Cambridge.
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  16. Barth, James R. & Caprio Jr, Gerard & Levine, Ross, 2001. "The regulation and supervision of banks around the world - a new database," Policy Research Working Paper Series 2588, The World Bank.
  17. Xavier Vives, 2001. "Restructuring Financial Regulation in the European Monetary Union," Journal of Financial Services Research, Springer, vol. 19(1), pages 57-82, February.
  18. William P. Osterberg & James B. Thomson, 1999. "Depositor-preference laws and the cost of debt capital," Economic Review, Federal Reserve Bank of Cleveland, issue Q III, pages 10-20.
  19. Diamond, Douglas W, 1984. "Financial Intermediation and Delegated Monitoring," Review of Economic Studies, Wiley Blackwell, vol. 51(3), pages 393-414, July.
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  22. Joseph G. Haubrich, 1996. "Combining bank supervision and monetary policy," Economic Commentary, Federal Reserve Bank of Cleveland, issue Nov.
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  1. Preventing bank runs – a primer
    by ? in Bruegel blog on 2013-04-02 10:58:20
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