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Conference Paper
Market-value accounting: benefits, costs and incentives
Conference Paper
What should bank regulators do? Why should regulators do anything?
Working Paper
Is the banking and payments system fragile?
Journal Article
Deposit insurance reform in the FDIC Improvement Act: the experience to date
In 1991, the U.S. adopted fundamental deposit insurance reform in the FDIC Improvement Act. This article reveals why such reform was necessary in light of the severe banking crisis of the 1980s and analyzes its success to date.
Working Paper
Potential diversification and bank acquisition prices
Working Paper
FDICIA after five years: a review and evaluation
At yearend 1991, Congress enacted fundamental deposit insurance reform for banks and thrifts in the FDIC Improvement Act (FDICIA). This reform followed the failure of more than 2,000 depository institutions in the 1980s. Many of these failed because of the incentive incompatibility of the structure of federal government-provided deposit insurance, which encouraged moral hazard behavior by banks and poor agent behavior by regulators. Insurance was put on a more incentive compatible basis by providing for a graduated series of sanctions that mimic market discipline and first may and then must ...
Journal Article
How should banks account for loan losses?
The agencies that regulate banks are involved in an ongoing debate about the appropriate way for banks and other lenders to account for default risk on loans. Accounting authorities are concerned with whether the accounting method meets the needs of general-purpose users of financial statements, particularly investors. In contrast, bank supervisors are concerned about banks being inadequately capitalized and possibly failing. ; To shed light on this debate, this article reviews the generally accepted accounting principles (GAAP) currently used, which are based on historic-cost values for ...