Reputational contagion and optimal regulatory forbearance

• 成果类型: Article
• 署名作者: Morrison, Alan D.; White, Lucy
• 署名单位: University of Oxford; Harvard University
• 刊物名称: JOURNAL OF FINANCIAL ECONOMICS
• ISSN/ISSBN: 0304-405X
• DOI: 10.1016/j.jfineco.2013.08.011
• 发表日期: 2013
• 页码: 642-658
• 关键词: contagion; reputation; Bank regulation

摘要

Existing studies suggest that systemic crises may arise because banks either hold correlated assets, or are connected by interbank lending. This paper shows that common regulation is also a conduit for interbank contagion. One bank's failure may undermine confidence in the banking regulator's competence, and, hence, in other banks chartered by the same regulator. As a result, depositors withdraw funds from otherwise unconnected banks. The optimal regulatory response to this behavior can be privately to exhibit forbearance to a failing bank. We show that regulatory transparency improves confidence ex ante but impedes regulators' ability to stem panics ex post. (C) 2013 Elsevier B.V. All rights reserved.