G28 - Government Policy and Regulation
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Estimation of the Default Risk of Publicly Traded Canadian Companies
Two models of default risk are prominent in the financial literature: Merton's structural model and Altman's non-structural model. -
Ownership Concentration and Competition in Banking Markets
Many countries prohibit large shareholdings in their domestic banks.The authors examine whether such a restriction restrains competition in a duopolistic loan market. Blockholders may influence managers' output decisions by choosing capital structure, as in Brander and Lewis (1986). -
Subordinated Debt and Market Discipline in Canada
The author documents the use by Canadian banks of subordinated debt (SD) as a capital instrument. -
An Analysis of Closure Policy under Alternative Regulatory Structures
The author develops a theoretical model of bank closure. The regulatory decision about bank failure consists of two parts: whether to close and how to close. -
The New Basel Capital Accord and the Cyclical Behaviour of Bank Capital
The authors conduct a counterfactual simulation of the proposed rules under the new Basel Capital Accord (Basel II), including the revised treatment of expected and unexpected credit losses proposed by the Basel Committee in October 2003. -
Competition in Banking: A Review of the Literature
The author reviews the theoretical and empirical literature to examine the traditional perception that the following trade-off exists between economic efficiency and stability in the banking system: a competitive banking system is more efficient and therefore important to growth, but market power is necessary for stability in the banking system. -
Public Venture Capital and Entrepreneurship
Entrepreneurship is a key factor in promoting growth in output and employment. Consequently, to encourage new start-ups, most governments in developed countries have public venture capital programs. -
Essays on Financial Stability
The four essays published here provide a useful overview for anyone interested in understanding the issues and policy environment surrounding financial system stability. -
Modelling Financial Instability: A Survey of the Literature
The magnitude and frequency of recent financial crises underscore the importance of understanding financial instability for the purpose of crisis prevention and crisis management.