Paper #664

Title:

An overall perspective on banking regulation

Author:

Xavier Freixas

Date:

February 2003

Abstract:

We survey the theory of banking regulation from the general perspective of regulatory theory. Starting by considering the different justifications of financial intermediation, we proceed to identify the market failures that make banking regulation necessary. We then succinctly compare how the analysis of regulation compares in the domains of banking and industrial organization. Finally we analyse why a safety net for banks could be part of banking regulation and how it can be structured in an efficient way.

Keywords:

Banking regulation, efficiency, financial stability, banking supervision

JEL codes:

G21, G28

Area of Research:

Finance and Accounting

Published in:

S. Bhattacharya, A. Boot and A. Thakor, editors, Credit, Intermediation and the Macroeconomy, Models and Perspetives Chapter Oxford University Press, Oxford, p.424-448, New York, 2004
With the title:
Regulation of Financial Intermediaries, A Discussion

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