Self-interested bank regulation
Article Abstract:
A two-period model of a bank's dynamic asset portfolio was used to examine the affect of a bank regulator's self-interest on regulation effectiveness and the role of the human factor in banking reform policy. Results indicate that a bank regulator's concern with reputation can distort judgment on closure policy and increase deposit insurance risk. Policy implications concerning separation of regulatory tasks, duration of appointment, latitude in closure decisions and asset portfolio rules are discussed.
Publication Name: American Economic Review
Subject: Economics
ISSN: 0002-8282
Year: 1993
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The effects of lower reserve requirements on money market volatility
Article Abstract:
A short-term model and an econometrical model of the money market are used to examine the impact of lower reserve requirements on market volatility and on short-term monetary policy objectives. Results indicate that these requirements do not affect volatility. It takes several months for rate changes to affect demand for transaction deposits. Both reserve requirements and rate impact demand for free reserves. The central bank has a combination role in the supply of non-borrowed reserves.
Publication Name: American Economic Review
Subject: Economics
ISSN: 0002-8282
Year: 1993
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Two fallacies concerning central-bank independence
Article Abstract:
Alternative theories have been developed where contracts between a country's government and its central bank allow the bank to follow activist counter-cyclical stabilization programs and simultaneously preventing monetary policy from generating an inflationary situation. Such theories are misleading because they fail to recognize independent central bank ability to establish stable monetary policy performance and the benefits from government-bank contracts.
Publication Name: American Economic Review
Subject: Economics
ISSN: 0002-8282
Year: 1995
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