55 research outputs found
Bank Management and Market Discipline
In recent years market discipline attracted interest as a mechanism to augment or to partially replace government oversight (discipline) of the financial sector, specifically depository institutions. Despite the abundance of research, mostly empirical studies, in the area no formal model has been presented to analyze the different aspects of the issue. This paper attempts to fill this gap. In our model we incorporate the characteristics of the regulatory structure and market discipline and examine the effects of several parameters on the optimal decisions of the bank. For example we consider the effects of changes in risk, deposit insurance coverage, and degree of market discipline. In most cases our results are compatible with recent empirical findings
BANK MANAGEMENT AND MARKET DISCIPLINE
In recent years market discipline attracted interest as a mechanism to augment or to partially replace government oversight (discipline) of the financial sector, specifically depository institutions. Despite the abundance of research, mostly empirical studies, in the area no formal model has been presented to analyze the different aspects of the issue. This paper attempts to fill this gap. In our model we incorporate the characteristics of the regulatory structure and market discipline and examine the effects of several parameters on the optimal decisions of the bank. For example we consider the effects of changes in risk, deposit insurance coverage, and degree of market discipline. In most cases our results are compatible with recent empirical findings
Liquidity Risk and Competition in Banking
Liquidity risk is one of the major risks faced by banks in addition to credit risk,
market risk and operating risk. In this paper we construct a stylized model of bank
management where the asset and liabilities liquidity structure are a key element in
determining the bank's exposure to liquidity risk. The main results of our model are
that liquidity risk increases when competition in the credit market increases while
increasing competition in the deposit market will decrease the liquidity shortage. Our
results are of particular importance as banks face increased liquidity risk due to the
recent developments in the financial markets
Bank Management and Market Discipline
In recent years market discipline attracted interest as a mechanism to augment or to partially replace government oversight (discipline) of the financial sector, specifically depository institutions. Despite the abundance of research, mostly empirical studies, in the area no formal model has been presented to analyze the different aspects of the issue. This paper attempts to fill this gap. In our model we incorporate the characteristics of the regulatory structure and market discipline and examine the effects of several parameters on the optimal decisions of the bank. For example we consider the effects of changes in risk, deposit insurance coverage, and degree of market discipline. In most cases our results are compatible with recent empirical findings
The effect of merger and acquisition activity on the safety and soundness of a banking system
Banking system, credit risk, merger and acquisition,
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