Jointly optimal regulation of bank capital and maturity structure
Banks create excessive systemic risk through leverage and maturity mismatch, as financial constraints introduce welfare-reducing pecuniary externalities. Macroprudential regulators can achieve efficiency with simple linear constraints on banks' balance sheets, which require less information th...
| Main Author: | |
|---|---|
| Format: | Working paper |
| Published: |
University of Oxford
2014
|