How Offshore Financial Competition Disciplines Exit Resistence by Incentive-Conflicted Bank Regulators

Edward Kane

No 7156, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: This paper studies the impact of technological change and regulatory competition on governmental efforts to generate rents for banks in two stylized regulatory environments. In the first environment, incentive-conflicted regulators attempt to create rents by restricting the size and scope of individual banking organizations. In the second, rents come from efforts to supply deposit guarantees to troubled banks. In both cases, innovations in financial technology and in competing domestic and offshore regulatory arrangements make the costs of delivering rents to banks more transparent to taxpayers and encourage customers to push rent-dependent banking systems into crisis. This analysis portrays the banking crises that have roiled world markets in recent years as information-producing events that identify and discredit inefficient strategies of regulating banking markets.

JEL-codes: G21 G28 (search for similar items in EconPapers)
Date: 1999-06
New Economics Papers: this item is included in nep-ifn
Note: CF
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Citations: View citations in EconPapers (4)

Published as Journal of Financial Services Research, Vol. 16, no. 2-3 (1999): 265-291.

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Journal Article: How Offshore Financial Competition Disciplines Exit Resistance by Incentive-Conflicted Bank Regulators (1999)
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