Are mortgages like potatoes? Unintended consequences in a world of many...
Authors: Renzo Corrias and Tobias Neumann. When banks are subject to both a leverage and a risk-weighted constraint they may violate a fundamental law of economics: that of demand. In our theoretical...
View ArticleIt’s a model – but is it looking good? When banks’ internal models may be...
Tobias Neumann. Most large banks assess the capital they need for regulatory purposes using ‘internal models’. The idea is that banks are in a better position to judge the risks on their own balance...
View ArticleFrom Berlin to Basel: what can 1930s Germany teach us about banking regulation?
Tobias Neumann. Two of the country’s largest banks collapse. The subsequent panic brings the banking system to its knees and only a costly government bail-out prevents even greater catastrophe. A...
View ArticleThe art of the deal: what can Nobel-winning contract theory teach us about...
Caterina Lepore, Caspar Siegert, Quynh-Anh Vo The 2016 Nobel Prize in economics has been awarded to Professors Oliver Hart and Bengt Holmström for their contributions to contract theory. The theory...
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Separating deposit-taking from investment banking: new evidence on an old...
Matthieu Chavaz and David Elliott On 16 June 1933, as the nationwide banking crisis was reaching a new peak, freshly elected US President Franklin D. Roosevelt put his signature at the bottom of a...
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The structure of regulatory revolutions
Austen Saunders and Rajan Patel What can the history and philosophy of science teach us about regulatory reform? In this post, we borrow Thomas Kuhn’s idea of ‘scientific revolutions’ to argue that...
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