TY - JOUR
T1 - Bank Capital Regulation With Random Audits
AU - Bhattacharya, Sudipto
AU - Plank, Manfred
AU - Strobl, Günter
AU - Zechner, Josef
PY - 2002
Y1 - 2002
N2 - We consider a model of optimal bank closure rules (cum capital replenishment by banks), with Poisson-distributed audits of the banks asset value by the regulator, with the goal of eliminating (ameliorating) the incentives of levered bank shareholders/managers to take excessive risks in their choice of underlying assets. The roles of (tax or other) subsidies on deposit interest payments by the bank, and of the auditing frequency are examined. 2002 Elsevier Science B.V. All rights reserved
AB - We consider a model of optimal bank closure rules (cum capital replenishment by banks), with Poisson-distributed audits of the banks asset value by the regulator, with the goal of eliminating (ameliorating) the incentives of levered bank shareholders/managers to take excessive risks in their choice of underlying assets. The roles of (tax or other) subsidies on deposit interest payments by the bank, and of the auditing frequency are examined. 2002 Elsevier Science B.V. All rights reserved
U2 - 10.1016/S0165-1889(01)00045-8
DO - 10.1016/S0165-1889(01)00045-8
M3 - Journal article
SN - 0165-1889
VL - 26
SP - 1301
EP - 1321
JO - Journal of Economic Dynamics and Control
JF - Journal of Economic Dynamics and Control
IS - 7-8
ER -