Regulations of Banking Groups


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Regulations of Banking Groups

Show simple item record Harr, Thomas en_US Rønde, Thomas en_US 2009-02-04T10:28:18Z 2009-02-04T10:28:18Z 2007-12-17T00:00:00Z en_US
dc.description.abstract We study the optimal regulation of banking groups ("banks”), taking both minimum capital requirements and legal structure into account. A bank can set up either as one legal unit facing limited liability jointly (branch structure) or as a bank holding company with subsidiaries (subsidiary structure). Banks are exposed to risk from their unobservable asset choices and to exogenous risk from their environment. We show that banks with branches are more prudent in normal times than banks with subsidiaries, but are also less prudent when problems arise. A regulator that observes banks’ exogenous risk should optimally determine both capital requirements and legal structure. If the exogenous risk is private information to banks, it can be optimal to screen banks according to risk by setting capital requirements appropriately, and letting banks choose their legal structure. en_US
dc.format.extent 33 s. en_US
dc.language eng en_US
dc.relation.ispartofseries Discussion paper;2007-01 en_US
dc.title Regulations of Banking Groups en_US
dc.type wp en_US
dc.accessionstatus modt07dec17 nijemo en_US
dc.contributor.corporation Copenhagen Business School. CBS en_US
dc.contributor.department Centre for Economic and Business Research en_US
dc.contributor.departmentshort CEBR en_US
dc.contributor.departmentuk Centre for Economic and Business Research en_US
dc.contributor.departmentukshort CEBR en_US
dc.idnumber x656555989 en_US København en_US
dc.publisher.year 2006 en_US

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