Multinational bank capital regulation with deposit insurance and diversification effects
We analyse a model in which bank deposits are insured and there is an exogenous cost of bank capital. The former effect results in bank overinvestment and the latter in underinvestment. Regulatory capital requirements introduce investment distortions which are a constrained optimal response to these...
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| Natura: | Working paper |
| Pubblicazione: |
University of Oxford
2003
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