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Bank capital and equity investment regulations

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  • João Cabral dos Santos

Abstract

An intermediation model that examines the efficiency and welfare implications of banks' required capital-asset ratio and of the regulations that limit - and in some countries forbid - banks' investments in equity to a certain proportion of each firm's capital. ; A look at how episodes of competing currencies can provide insight on 1) the qualities of a commodity that lead to its becoming a dominant currency, 2) the route by which a nationally mandated paper currency becomes acceptable as a medium of exchange, and 3) the way in which competition between currencies sustains the exchange value of a fiat currency by restricting the actions available to the monetary authority. ; A look at how episodes of competing currencies can provide insight on 1) the qualities of a commodity that lead to its becoming a dominant currency, 2) the route by which a nationally mandated paper currency becomes acceptable as a medium of exchange, and 3) the way in which competition between currencies sustains the exchange value of a fiat currency by restricting the actions available to the monetary authority.

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Bibliographic Info

Paper provided by Federal Reserve Bank of Cleveland in its series Working Paper with number 9515.

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Date of creation: 1995
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Handle: RePEc:fip:fedcwp:9515

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Keywords: Bank capital ; Bank investments;

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References

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  1. Hayne E. Leland and David H. Pyle., 1976. "Informational Asymmetries, Financial Structure, and Financial Intermediation," Research Program in Finance Working Papers, University of California at Berkeley 41, University of California at Berkeley.
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  3. Rochet, Jean-Charles, 1992. "Capital requirements and the behaviour of commercial banks," European Economic Review, Elsevier, Elsevier, vol. 36(5), pages 1137-1170, June.
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  6. Yuk-Shee Chan & Stuart I. Greenbaum & Anjan V. Thakor, 2004. "Is Fairly Priced Deposit Insurance Possible?," Finance, EconWPA 0411018, EconWPA.
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  9. O'Hara Maureen, 1993. "Real Bills Revisited: Market Value Accounting and Loan Maturity," Journal of Financial Intermediation, Elsevier, Elsevier, vol. 3(1), pages 51-76, October.
  10. Buser, Stephen A & Chen, Andrew H & Kane, Edward J, 1981. "Federal Deposit Insurance, Regulatory Policy, and Optimal Bank Capital," Journal of Finance, American Finance Association, American Finance Association, vol. 36(1), pages 51-60, March.
  11. Flannery, Mark J., 1989. "Capital regulation and insured banks choice of individual loan default risks," Journal of Monetary Economics, Elsevier, Elsevier, vol. 24(2), pages 235-258, September.
  12. Sun Bae Kim, 1992. "Corporate financing through a shareholder bank: lessons from Japan," Pacific Basin Working Paper Series, Federal Reserve Bank of San Francisco 92-03, Federal Reserve Bank of San Francisco.
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  15. Keeley, Michael C. & Furlong, Frederick T., 1990. "A reexamination of mean-variance analysis of bank capital regulation," Journal of Banking & Finance, Elsevier, Elsevier, vol. 14(1), pages 69-84, March.
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  18. Koehn, Michael & Santomero, Anthony M, 1980. " Regulation of Bank Capital and Portfolio Risk," Journal of Finance, American Finance Association, American Finance Association, vol. 35(5), pages 1235-44, December.
  19. Frederick T. Furlong & Michael C. Keeley, 1991. "Capital regulation and bank risk-taking: a note (reprinted from Journal of Banking and Finance)," Economic Review, Federal Reserve Bank of San Francisco, Federal Reserve Bank of San Francisco, issue Sum, pages 34-39.
  20. John, Kose & John, Teresa A. & Saunders, Anthony, 1994. "Universal banking and firm risk-taking," Journal of Banking & Finance, Elsevier, Elsevier, vol. 18(2), pages 307-323, January.
  21. Furlong, Frederick T. & Keeley, Michael C., 1989. "Capital regulation and bank risk-taking: A note," Journal of Banking & Finance, Elsevier, Elsevier, vol. 13(6), pages 883-891, December.
  22. Dothan, Uri & Williams, Joseph, 1980. "Banks, bankruptcy, and public regulation," Journal of Banking & Finance, Elsevier, Elsevier, vol. 4(1), pages 65-87, March.
  23. James, Christopher, 1995. "When Do Banks Take Equity in Debt Restructurings?," Review of Financial Studies, Society for Financial Studies, Society for Financial Studies, vol. 8(4), pages 1209-34.
  24. Tim S. Campbell & Yuk-Shee Chan & Anthony M. Marino, 1990. "An incentive based theory of bank regulation," Proceedings, Federal Reserve Bank of San Francisco, Federal Reserve Bank of San Francisco, issue Nov.
  25. Hart, Oliver D & Jaffee, Dwight M, 1974. "On the Application of Portfolio Theory to Depository Financial Intermediaries," Review of Economic Studies, Wiley Blackwell, Wiley Blackwell, vol. 41(1), pages 129-47, January.
  26. Kim, Daesik & Santomero, Anthony M, 1988. " Risk in Banking and Capital Regulation," Journal of Finance, American Finance Association, American Finance Association, vol. 43(5), pages 1219-33, December.
  27. Lawrence R. Cordell & Kathleen Kuester King, 1992. "A market evaluation of the risk-based capital standards for the U.S. financial system," Finance and Economics Discussion Series, Board of Governors of the Federal Reserve System (U.S.) 189, Board of Governors of the Federal Reserve System (U.S.).
  28. Sealey, C. Jr., 1985. "Portfolio separation for stockholder owned depository financial intermediaries," Journal of Banking & Finance, Elsevier, Elsevier, vol. 9(4), pages 477-490, December.
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