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Regulation and Governance of Financial Institutions
This two-volume collection contains fifty influential articles published over the past four decades on the regulation and governance of financial institutions. Some contribute by making theoretical advances that enhance the conceptual framework through which economists view financial institutions, and others contribute by assembling data and evaluating the predictions of these different models. Including an original introduction, the papers provide a foundation for understanding and conducting additional research into the regulation and governance of financial institutions.
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Contributors
Contents
More Information
This two-volume collection contains fifty influential articles published over the past four decades on the regulation and governance of financial institutions. Some contribute by making theoretical advances that enhance the conceptual framework through which economists view financial institutions, and others contribute by assembling data and evaluating the predictions of these different models. Including an original introduction, the papers provide a foundation for understanding and conducting additional research into the regulation and governance of financial institutions.
Contributors
50 articles, dating from 1980 to 2014
Contributors include: J. Boyd, C.W. Calomiris, A. Demirgüç-Kunt, D.W. Diamond, R. La Porta, R. Rajan, A. Saunders, A. Shleifer, J. Tirole, L. Zingales
Contributors include: J. Boyd, C.W. Calomiris, A. Demirgüç-Kunt, D.W. Diamond, R. La Porta, R. Rajan, A. Saunders, A. Shleifer, J. Tirole, L. Zingales
Contents
Contents:
Acknowledgements
Introduction James R. Barth and Ross Levine
PART I BANKING POLICIES
1. Douglas W. Diamond and Philip H. Dybvig (1983), ‘Bank Runs, Deposit Insurance, and Liquidity’, Journal of Political Economy, 91 (3), June, 401–19
2. Stephen A. Buser, Andrew H. Chen and Edward J. Kane (1981), ‘Federal Deposit Insurance, Regulatory Policy, and Optimal Bank Capital’, Journal of Finance, XXXVI (1), March, 51–60
3. Michael C. Keeley (1990), ‘Deposit Insurance, Risk, and Market Power in Banking’, American Economic Review, 80 (5), December, 1183–200
4. Asli Demirgüç-Kunt and Enrica Detragiache (2002), ‘Does Deposit Insurance Increase Banking System Stability? An Empirical Investigation’, Journal of Monetary Economics, 49 (7), October, 1373–406
5. Michael Koehn and Anthony M. Santomero (1980), ‘Regulation of Bank Capital and Portfolio Risk’, Journal of Finance, XXXV (5), December, 1235–44
6. Daesik Kim and Anthony M. Santomero (1988), ‘Risk in Banking and Capital Regulation’, Journal of Finance, XLIII (5), December, 1219–33
7. Douglas W. Diamond and Raghuram G. Rajan (2000), ‘A Theory of Bank Capital’, Journal of Finance, LV (6), 2431–65
8. Randall S. Kroszner and Raghuram G. Rajan (1994), ‘Is the Glass-Steagall Act Justified? A Study of the U.S. Experience with Universal Banking Before 1933’, American Economic Review, 84 (4), September, 810–32
9. Jith Jayaratne and and Philip E. Strahan (1996), ‘The Finance-Growth Nexus: Evidence from Bank Branch Deregulation’, Quarterly Journal of Economics, 111 (3), August, 639–70
10. Thomas F. Hellman, Kevin C. Murdock and Joseph E. Stiglitz (2000), ‘Liberalization, Moral Hazard in Banking, and Prudential Regulation: Are Capital Requirements Enough?’, American Economic Review, 90 (1), March, 147–65
11. Anjan V. Thakor (1996), ‘Capital Requirements, Monetary Policy, and Aggregate Bank Lending: Theory and Empirical Evidence’, Journal of Finance, LI (1), March, 279–324
12. Viral V. Acharya (2009), ‘A Theory of Systemic Risk and Design of Prudential Bank Regulation’, Journal of Financial Stability, 5 (3), September, 224–55
13. James R. Barth, Gerard Caprio Jr. and Ross Levine (2004), ‘Bank Regulation and Supervision: What Works Best?’, Journal of Financial Intermediation, 13 (2), April, 205–48
14. James R. Barth, Gerard Caprio Jr. and Ross Levine (2013), ‘Bank Regulation and Supervision in 180 Countries from 1999 to 2011’, Journal of Financial Economic Policy, 5 (2), 111–219
PART II OWNERSHIP AND MANAGEMENT OF BANKS
15. Anthony Saunders, Elizabeth Strock and Nickolaos G. Travlos (1990), ‘Ownership Structure, Deregulation, and Bank Risk Taking’, Journal of Finance, XLV (2), June, 643–54
16. Gerard Caprio, Luc Laeven and Ross Levine (2007), ‘Governance and Bank Valuation’, Journal of Financial Intermediation, 16 (4), October, 584–617
17. Luc Laeven and Ross Levine (2009), ‘Bank Governance, Regulation and Risk Taking’, Journal of Financial Economics, 93 (2), August, 259–75
18. Rafael La Porta, Florencio Lopez‐de‐Silanes and Andrei Shleifer (2002), ‘Government Ownership of Banks’, Journal of Finance, LVII (1), February, 265–301
19. Gary Gorton and Richard Rosen (1995), ‘Corporate Control, Portfolio Choice, and the Decline of Banking’, Journal of Finance, L (5), December, 1377–420
20. Joel F. Houston and Christopher James (1995), ‘CEO Compensation and Bank Risk. Is Compensation in Banking Structured to Promote Risk Taking?’, Journal of Monetary Economics, 36 (2), 405–31
21. Kose John, Anthony Saunders and Lemma W. Senbet (2000), ‘A Theory of Bank Regulation and Management Compensation’, Review of Financial Studies, 13 (1), January, 95–125
22. Renée B. Adams and Hamid Mehran (2012), ‘Bank Board Structure and Performance: Evidence for Large Bank Holding Companies’, Journal of Financial Intermediation, 21 (2), 243–67
23. Rüdiger Fahlenbrach and René M. Stulz (2011), ‘Bank CEO Incentives and the Credit Crisis’, Journal of Financial Economics, 99 (1), January, 11–26
24. Rüdiger Fahlenbrach, Robert Prilmeier and René M. Stulz (2012), ‘This Time Is the Same: Using Bank Performance in 1998 to Explain Bank Performance during the Recent Financial Crisis’, Journal of Finance, LXVII (6), December, 2139–85
25. Takeo Hoshi, Anil Kashyap and David Scharfstein (1991), ‘Corporate Structure, Liquidity, and Investment: Evidence from Japanese Industrial Groups’, Quarterly Journal of Economics, 106 (1), February, 33–60
26. Gary Gorton and Frank A. Schmid (2000), ‘Universal Banking and the Performance of German Firms’, Journal of Financial Economics, 58 (1–2), 29–80
Volume II
Contents:
Acknowledgements
An introduction to both volumes by the editors appears in Volume I
PART I STRUCTURE AND COMPETITION IN THE BANKING INDUSTRY
1. Allen N. Berger, Anthony Saunders, Joseph M. Scalise and Gregory F. Udell (1988), ‘The Effects of Bank Mergers and Acquisitions on Small Business Lending’, Journal of Financial Economics, 50 (2), November, 187–229
2. Allen N. Berger and David B. Humphrey (1991), ‘The Dominance of Inefficiencies Over Scale and Product Mix Economies in Banking’, Journal of Monetary Economics, 28 (1), August, 117–48
3. John H. Boyd and David E. Runkle (1993), ‘Size and Performance of Banking Firms: Testing the Predictions of Theory’, Journal of Monetary Economics, 31 (1), February, 47–67
4. John H. Boyd and Gianni De Nicoló (2005), ‘The Theory of Bank Risk Taking and Competition Revisited’, Journal of Finance, LX (2), June, 1329–43
PART II RUNS, CONTAGION AND SYSTEMATIC RISK IN BANKING
5. Charles W. Calomiris and Charles M. Kahn (1991), ‘The Role of Demandable Debt in Structuring Optimal Banking Arrangements’, American Economic Review, 81 (3), 497–513
6. Douglas W. Diamond and Raghuram G. Rajan (2001), ‘Liquidity Risk, Liquidity Creation, and Financial Fragility: A Theory of Banking’, Journal of Political Economy, 109 (2), April, 287–327
7. Franklin Allen and Douglas Gale (1998) ‘Optimal Financial Crises’, Journal of Finance, LIII (4), August, 1245–84
8. Franklin Allen and Douglas Gale (2000), ‘Financial Contagion’, Journal of Political Economy, 108 (1), February, 1–33
9. Charles W. Calomiris and Joseph R. Mason (1997), ‘Contagion and Bank Failures During the Great Depression: The June 1932 Chicago Banking Panic’, American Economic Review, 87 (5), December, 863–83
10. Charles W. Calomiris and Joseph R. Mason (2003), ‘Fundamentals, Panics, and Bank Distress During the Depression’, American Economic Review, 93 (5), December, 1615–47
11. Donald P. Morgan (2002), ‘Rating Banks: Risk and Uncertainty in an Opaque Industry’, American Economic Review, 92 (4), September, 874–88
12. Bengt Holmstrom and Jean Tirole (1997), ‘Financial Intermediation, Loanable Funds, and the Real Sector’, Quarterly Journal of Economics, CXII (3), August, 663–91
13. Andrea Beltratti and René M. Stulz (2012), ‘The Credit Crisis Around the Globe: Why Did Some Banks Perform Better?’, Journal of Financial Economics, 105 (1), July, 1–17
PART III LEGAL AND POLITICAL FACTORS SHAPING BANKING
14. Rafael La Porta, Florencio Lopez de Silanes, Andrei Shleifer and Robert W. Vishny (1998), ‘Law and Finance’, Journal of Political Economy, 106 (6), December, 1113–55
15. Thorsten Beck, Asli Demirgüç-Kunt and Ross Levine (2003), ‘Law, Endowments, and Finance’, Journal of Financial Economics, 70 (2), November, 137–81
16. Raghuram G. Rajan and Luigi Zingales (2003), ‘The Great Reversals: The Politics of Financial Development in the Twentieth Century’, Journal of Financial Economics, 69 (1), July, 5–50
17. Benjamin C. Esty (1998), ‘The Impact of Contingent Liability on Commercial Bank Risk Taking’, Journal of Financial Economics, 47 (2), February, 189–218
18. Randall S. Kroszner and Philip E. Strahan (1999), ‘What Drives Deregulation? Economics and Politics of the Relaxation of the Bank Branching Restrictions’, Quarterly Journal of Economics, 114 (4), November, 1437–67
19. Asim Ijaz Khwaja and Atif Mian (2005), ‘Do Lenders Favor Politically Connected Firms? Rent Provision in an Emerging Financial Market’, Quarterly Journal of Economics, 120 (4), November, 1371–411
20. I. Serdar Dinç (2005), ‘Politicians and Banks: Political Influences on Government-Owned Banks in Emerging Markets’, Journal of Financial Economics, 77 (2), August, 453–79
21. Noel Maurer and Stephen Haber (2007), ‘Related Lending and Economic Performance: Evidence from Mexico’, Journal of Economic History, 67 (3), September, 551–81
22. Pietro Veronesi and Luigi Zingales (2010), ‘Paulson’s Gift’, Journal of Financial Economics, 97 (3), September, 339–68
23. Emmanuel Farhi and Jean Tirole (2012), ‘Collective Moral Hazard, Maturity Mismatch, and Systemic Bailouts’, American Economic Review, 102 (1), February, 60–93
24. Viral Acharya, Itamar Drechsler and Philipp Schnabl (2014), ‘A Pyrrhic Victory? Bank Bailouts and Sovereign Credit Risk’, Journal of Finance, LXIX (6), December, 2689–739
Index
Acknowledgements
Introduction James R. Barth and Ross Levine
PART I BANKING POLICIES
1. Douglas W. Diamond and Philip H. Dybvig (1983), ‘Bank Runs, Deposit Insurance, and Liquidity’, Journal of Political Economy, 91 (3), June, 401–19
2. Stephen A. Buser, Andrew H. Chen and Edward J. Kane (1981), ‘Federal Deposit Insurance, Regulatory Policy, and Optimal Bank Capital’, Journal of Finance, XXXVI (1), March, 51–60
3. Michael C. Keeley (1990), ‘Deposit Insurance, Risk, and Market Power in Banking’, American Economic Review, 80 (5), December, 1183–200
4. Asli Demirgüç-Kunt and Enrica Detragiache (2002), ‘Does Deposit Insurance Increase Banking System Stability? An Empirical Investigation’, Journal of Monetary Economics, 49 (7), October, 1373–406
5. Michael Koehn and Anthony M. Santomero (1980), ‘Regulation of Bank Capital and Portfolio Risk’, Journal of Finance, XXXV (5), December, 1235–44
6. Daesik Kim and Anthony M. Santomero (1988), ‘Risk in Banking and Capital Regulation’, Journal of Finance, XLIII (5), December, 1219–33
7. Douglas W. Diamond and Raghuram G. Rajan (2000), ‘A Theory of Bank Capital’, Journal of Finance, LV (6), 2431–65
8. Randall S. Kroszner and Raghuram G. Rajan (1994), ‘Is the Glass-Steagall Act Justified? A Study of the U.S. Experience with Universal Banking Before 1933’, American Economic Review, 84 (4), September, 810–32
9. Jith Jayaratne and and Philip E. Strahan (1996), ‘The Finance-Growth Nexus: Evidence from Bank Branch Deregulation’, Quarterly Journal of Economics, 111 (3), August, 639–70
10. Thomas F. Hellman, Kevin C. Murdock and Joseph E. Stiglitz (2000), ‘Liberalization, Moral Hazard in Banking, and Prudential Regulation: Are Capital Requirements Enough?’, American Economic Review, 90 (1), March, 147–65
11. Anjan V. Thakor (1996), ‘Capital Requirements, Monetary Policy, and Aggregate Bank Lending: Theory and Empirical Evidence’, Journal of Finance, LI (1), March, 279–324
12. Viral V. Acharya (2009), ‘A Theory of Systemic Risk and Design of Prudential Bank Regulation’, Journal of Financial Stability, 5 (3), September, 224–55
13. James R. Barth, Gerard Caprio Jr. and Ross Levine (2004), ‘Bank Regulation and Supervision: What Works Best?’, Journal of Financial Intermediation, 13 (2), April, 205–48
14. James R. Barth, Gerard Caprio Jr. and Ross Levine (2013), ‘Bank Regulation and Supervision in 180 Countries from 1999 to 2011’, Journal of Financial Economic Policy, 5 (2), 111–219
PART II OWNERSHIP AND MANAGEMENT OF BANKS
15. Anthony Saunders, Elizabeth Strock and Nickolaos G. Travlos (1990), ‘Ownership Structure, Deregulation, and Bank Risk Taking’, Journal of Finance, XLV (2), June, 643–54
16. Gerard Caprio, Luc Laeven and Ross Levine (2007), ‘Governance and Bank Valuation’, Journal of Financial Intermediation, 16 (4), October, 584–617
17. Luc Laeven and Ross Levine (2009), ‘Bank Governance, Regulation and Risk Taking’, Journal of Financial Economics, 93 (2), August, 259–75
18. Rafael La Porta, Florencio Lopez‐de‐Silanes and Andrei Shleifer (2002), ‘Government Ownership of Banks’, Journal of Finance, LVII (1), February, 265–301
19. Gary Gorton and Richard Rosen (1995), ‘Corporate Control, Portfolio Choice, and the Decline of Banking’, Journal of Finance, L (5), December, 1377–420
20. Joel F. Houston and Christopher James (1995), ‘CEO Compensation and Bank Risk. Is Compensation in Banking Structured to Promote Risk Taking?’, Journal of Monetary Economics, 36 (2), 405–31
21. Kose John, Anthony Saunders and Lemma W. Senbet (2000), ‘A Theory of Bank Regulation and Management Compensation’, Review of Financial Studies, 13 (1), January, 95–125
22. Renée B. Adams and Hamid Mehran (2012), ‘Bank Board Structure and Performance: Evidence for Large Bank Holding Companies’, Journal of Financial Intermediation, 21 (2), 243–67
23. Rüdiger Fahlenbrach and René M. Stulz (2011), ‘Bank CEO Incentives and the Credit Crisis’, Journal of Financial Economics, 99 (1), January, 11–26
24. Rüdiger Fahlenbrach, Robert Prilmeier and René M. Stulz (2012), ‘This Time Is the Same: Using Bank Performance in 1998 to Explain Bank Performance during the Recent Financial Crisis’, Journal of Finance, LXVII (6), December, 2139–85
25. Takeo Hoshi, Anil Kashyap and David Scharfstein (1991), ‘Corporate Structure, Liquidity, and Investment: Evidence from Japanese Industrial Groups’, Quarterly Journal of Economics, 106 (1), February, 33–60
26. Gary Gorton and Frank A. Schmid (2000), ‘Universal Banking and the Performance of German Firms’, Journal of Financial Economics, 58 (1–2), 29–80
Volume II
Contents:
Acknowledgements
An introduction to both volumes by the editors appears in Volume I
PART I STRUCTURE AND COMPETITION IN THE BANKING INDUSTRY
1. Allen N. Berger, Anthony Saunders, Joseph M. Scalise and Gregory F. Udell (1988), ‘The Effects of Bank Mergers and Acquisitions on Small Business Lending’, Journal of Financial Economics, 50 (2), November, 187–229
2. Allen N. Berger and David B. Humphrey (1991), ‘The Dominance of Inefficiencies Over Scale and Product Mix Economies in Banking’, Journal of Monetary Economics, 28 (1), August, 117–48
3. John H. Boyd and David E. Runkle (1993), ‘Size and Performance of Banking Firms: Testing the Predictions of Theory’, Journal of Monetary Economics, 31 (1), February, 47–67
4. John H. Boyd and Gianni De Nicoló (2005), ‘The Theory of Bank Risk Taking and Competition Revisited’, Journal of Finance, LX (2), June, 1329–43
PART II RUNS, CONTAGION AND SYSTEMATIC RISK IN BANKING
5. Charles W. Calomiris and Charles M. Kahn (1991), ‘The Role of Demandable Debt in Structuring Optimal Banking Arrangements’, American Economic Review, 81 (3), 497–513
6. Douglas W. Diamond and Raghuram G. Rajan (2001), ‘Liquidity Risk, Liquidity Creation, and Financial Fragility: A Theory of Banking’, Journal of Political Economy, 109 (2), April, 287–327
7. Franklin Allen and Douglas Gale (1998) ‘Optimal Financial Crises’, Journal of Finance, LIII (4), August, 1245–84
8. Franklin Allen and Douglas Gale (2000), ‘Financial Contagion’, Journal of Political Economy, 108 (1), February, 1–33
9. Charles W. Calomiris and Joseph R. Mason (1997), ‘Contagion and Bank Failures During the Great Depression: The June 1932 Chicago Banking Panic’, American Economic Review, 87 (5), December, 863–83
10. Charles W. Calomiris and Joseph R. Mason (2003), ‘Fundamentals, Panics, and Bank Distress During the Depression’, American Economic Review, 93 (5), December, 1615–47
11. Donald P. Morgan (2002), ‘Rating Banks: Risk and Uncertainty in an Opaque Industry’, American Economic Review, 92 (4), September, 874–88
12. Bengt Holmstrom and Jean Tirole (1997), ‘Financial Intermediation, Loanable Funds, and the Real Sector’, Quarterly Journal of Economics, CXII (3), August, 663–91
13. Andrea Beltratti and René M. Stulz (2012), ‘The Credit Crisis Around the Globe: Why Did Some Banks Perform Better?’, Journal of Financial Economics, 105 (1), July, 1–17
PART III LEGAL AND POLITICAL FACTORS SHAPING BANKING
14. Rafael La Porta, Florencio Lopez de Silanes, Andrei Shleifer and Robert W. Vishny (1998), ‘Law and Finance’, Journal of Political Economy, 106 (6), December, 1113–55
15. Thorsten Beck, Asli Demirgüç-Kunt and Ross Levine (2003), ‘Law, Endowments, and Finance’, Journal of Financial Economics, 70 (2), November, 137–81
16. Raghuram G. Rajan and Luigi Zingales (2003), ‘The Great Reversals: The Politics of Financial Development in the Twentieth Century’, Journal of Financial Economics, 69 (1), July, 5–50
17. Benjamin C. Esty (1998), ‘The Impact of Contingent Liability on Commercial Bank Risk Taking’, Journal of Financial Economics, 47 (2), February, 189–218
18. Randall S. Kroszner and Philip E. Strahan (1999), ‘What Drives Deregulation? Economics and Politics of the Relaxation of the Bank Branching Restrictions’, Quarterly Journal of Economics, 114 (4), November, 1437–67
19. Asim Ijaz Khwaja and Atif Mian (2005), ‘Do Lenders Favor Politically Connected Firms? Rent Provision in an Emerging Financial Market’, Quarterly Journal of Economics, 120 (4), November, 1371–411
20. I. Serdar Dinç (2005), ‘Politicians and Banks: Political Influences on Government-Owned Banks in Emerging Markets’, Journal of Financial Economics, 77 (2), August, 453–79
21. Noel Maurer and Stephen Haber (2007), ‘Related Lending and Economic Performance: Evidence from Mexico’, Journal of Economic History, 67 (3), September, 551–81
22. Pietro Veronesi and Luigi Zingales (2010), ‘Paulson’s Gift’, Journal of Financial Economics, 97 (3), September, 339–68
23. Emmanuel Farhi and Jean Tirole (2012), ‘Collective Moral Hazard, Maturity Mismatch, and Systemic Bailouts’, American Economic Review, 102 (1), February, 60–93
24. Viral Acharya, Itamar Drechsler and Philipp Schnabl (2014), ‘A Pyrrhic Victory? Bank Bailouts and Sovereign Credit Risk’, Journal of Finance, LXIX (6), December, 2689–739
Index
