Do banks need a supervisor?

Maksim Osadchiy and Alexander Sidorov ()

MPRA Paper from University Library of Munich, Germany

Abstract: The paper studies a simple microeconomic stochastic model of a bank operating in a competitive environment. The model allows us to describe the conditions on the model parameters that generate both the formation of bubbles in the credit market and the formation of stable banks with self-restrictive behavior, that do not require the intervention of the regulator. The comparative statics of equilibria is studied with respect to the basic parameters of the model, a theoretical assessment is carried out of the probability of bank default based on the values of exogenous factors in both the short and long term.

Keywords: Banking microeconomics; Credit bubble; Probability of default; Capital adequacy ratio (search for similar items in EconPapers)
JEL-codes: G21 G28 G32 G33 (search for similar items in EconPapers)
Date: 2019-07-22
New Economics Papers: this item is included in nep-ban and nep-cba
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https://mpra.ub.uni-muenchen.de/95290/1/MPRA_paper_95290.pdf original version (application/pdf)
https://mpra.ub.uni-muenchen.de/95919/1/MPRA_paper_95290.pdf revised version (application/pdf)
https://mpra.ub.uni-muenchen.de/95995/4/MPRA_paper_95995.pdf revised version (application/pdf)
https://mpra.ub.uni-muenchen.de/96825/8/MPRA_paper_96825.pdf revised version (application/pdf)

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