Discussion Paper

Designing Bank Regulation with Accounting Discretion

Abstract: Why does the banking industry remain prone to large and costly disruptions despite being so heavily regulated? Is there a need for more regulation, less regulation, or simply different regulation? Our recent Staff Report combines insights from academic research in economics, finance, and accounting to provide a deeper understanding of the challenges involved in designing and implementing bank regulation, as well as opportunities for future exploration. This post focuses on the regulation of bank capital, but the ideas are applicable more broadly.

JEL Classification: D62; E44; G21; G28; M41;

https://doi.org/10.59576/lse.20251215

Bibliographic Information

Provider: Federal Reserve Bank of New York

Part of Series: Liberty Street Economics

Publication Date: 2025-12-15

Number: 20251215