IDEAS home Printed from https://ideas.repec.org/a/mcb/jmoncb/v38y2006i4p1111-1118.html
   My bibliography  Save this article

Who Should Act as Lender of Last Resort? An Incomplete Contracts Model: A Comment

Author

Listed:
  • Kahn, Charles M.
  • Santos, Joao A. C.

Abstract

Researchers have pointed out that conflicts between the objectives of different bank regulators necessitate careful design of the institutional allocation of regulatory authority. In doing this, however, they often assume that regulators have incentives to share their private information regarding regulated banks. Our paper shows that the very same considerations that lead bank regulators to make different policy choices render the information-sharing assumption invalid. We further show that this result has important implications for the institutional allocation of lending of last resort, deposit insurance, and bank supervision.

Suggested Citation

  • Kahn, Charles M. & Santos, Joao A. C., 2006. "Who Should Act as Lender of Last Resort? An Incomplete Contracts Model: A Comment," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 38(4), pages 1111-1118, June.
    • Handle: RePEc:mcb:jmoncb:v:38:y:2006:i:4:p:1111-1118
    DOI: 10.1353/mcb.2006.0057
    as

    Download full text from publisher

    File URL: http://dx.doi.org/10.1353/mcb.2006.0057
    File Function: full text
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1353/mcb.2006.0057?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Santos, João A.C. & Suarez, Javier, 2019. "Liquidity standards and the value of an informed lender of last resort," Journal of Financial Economics, Elsevier, vol. 132(2), pages 351-368.
    2. Xavier Freixas, 2009. "Monetary policy in a systemic crisis," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 25(4), pages 630-653, Winter.
    3. Ponce, Jorge & Rennert, Marc, 2015. "Systemic banks and the lender of last resort," Journal of Banking & Finance, Elsevier, vol. 50(C), pages 286-297.
    4. Ponce, Jorge, 2010. "Lender of last resort policy: What reforms are necessary?," Journal of Financial Intermediation, Elsevier, vol. 19(2), pages 188-206, April.
    5. Matthew Plosser & João A. C. Santos, 2014. "Banks' incentives and the quality of internal risk models," Staff Reports 704, Federal Reserve Bank of New York.
    6. Ralf Bebenroth & Diemo Dietrich & Uwe Vollmer, 2009. "Bank regulation and supervision in bank-dominated financial systems: a comparison between Japan and Germany," European Journal of Law and Economics, Springer, vol. 27(2), pages 177-209, April.
    7. Xavier Freixas & Bruno Maria Parigi, 2008. "Lender of Last Resort and Bank Closure Policy," CESifo Working Paper Series 2286, CESifo.
    8. Pierre C. Boyer & Jorge Ponce, 2011. "Central Banks and Banking Supervision Reform," Chapters, in: Sylvester Eijffinger & Donato Masciandaro (ed.), Handbook of Central Banking, Financial Regulation and Supervision, chapter 6, Edward Elgar Publishing.
    9. Matej Marinc & Razvan Vlahu, 2011. "The Economic Perspective of Bank Bankruptcy Law," DNB Working Papers 310, Netherlands Central Bank, Research Department.
    10. Boyer, Pierre C. & Ponce, Jorge, 2012. "Regulatory capture and banking supervision reform," Journal of Financial Stability, Elsevier, vol. 8(3), pages 206-217.
    11. Pierre C. Boyer & Jorge Ponce, 2010. "Central banks, regulatory capture and banking supervision reform," Documentos de trabajo 2010003, Banco Central del Uruguay.
    12. Hauck, Achim & Vollmer, Uwe, 2013. "Emergency liquidity provision to public banks: Rules versus discretion," European Journal of Political Economy, Elsevier, vol. 32(C), pages 193-204.
    13. Jorge Ponce & Magdalena Tubio, 2010. "Estabilidad financiera: conceptos básicos," Documentos de trabajo 2010004, Banco Central del Uruguay.
    14. Behr, Patrick & Wang, Weichao, 2020. "The (un)intended effects of government bailouts: The impact of TARP on the interbank market and bank risk-taking," Journal of Banking & Finance, Elsevier, vol. 116(C).
    15. Marco A Espinosa-Vega & Mr. Rafael Matta & Mr. Charles M. Kahn & Mr. Juan Sole, 2011. "Systemic Risk and Optimal Regulatory Architecture," IMF Working Papers 2011/193, International Monetary Fund.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:mcb:jmoncb:v:38:y:2006:i:4:p:1111-1118. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley-Blackwell Digital Licensing or Christopher F. Baum (email available below). General contact details of provider: http://www.blackwellpublishing.com/journal.asp?ref=0022-2879 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.