【PPT精品课件】货币金融学7版英文课件--11-大学课件2.pptx

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1、Chapter 11Economic Analysis of Banking Regulation 2005 Pearson Education Canada Inc.How Asymmetric InformationExplains Banking Regulation1.Government Safety Net and Deposit InsuranceA.Prevents bank runs due to asymmetric information:depositors cant tell good from bad banksB.Creates moral hazard ince

2、ntives for banks to take on too much riskC.Creates adverse selection problem of crooks and risk-takers wanting to control banksD.Too-Big-to-Fail increases moral hazard incentives for big banks2.Restrictions on Asset HoldingsA.Reduces moral hazard of too much risk taking2 2005 Pearson Education Canad

3、a Inc.3.Bank Capital RequirementsA.Reduces moral hazard:banks have more to lose when have higher capitalB.Higher capital means more collateral for FDIC4.Bank Supervision:Chartering and ExaminationA.Reduces adverse selection problem of risk takers or crooks owning banksB.Reduces moral hazard by preve

4、nting risky activities5.New Trend:Assessment of Risk Management6.Disclosure RequirementsA.Better information reduces asymmetric information problemHow Asymmetric InformationExplains Banking Regulation3 2005 Pearson Education Canada Inc.3.Bank Capital RequirementsA.Reduces moral hazard:banks have mor

5、e to lose when have higher capitalB.Higher capital means more collateral for CDIC4.Bank Supervision:Chartering and ExaminationA.Reduces adverse selection problem of risk takers or crooks owning banksB.Reduces moral hazard by preventing risky activitiesC.New trend:Assessment of risk management5.Discl

6、osure RequirementsA.Better information reduces asymmetric information problemHow Asymmetric InformationExplains Banking Regulation4 2005 Pearson Education Canada Inc.Major Banking Legislation in Canada5 2005 Pearson Education Canada Inc.Major Banking Legislation in Canada 2005 Pearson Education Cana

7、da Inc.6Why a Banking Crisis in 1980s?Early Stages1.Managers did not have the required expertise to manage risk2.The existence of CDIC,more opportunities for risk taking3.Because of the lending boom,bank activities were becoming more complicated.Regulators had neither the expertise nor the resources

8、 to monitor these activities appropriately4.4.i ,net worth of banks A.Insolvencies B.Incentives for risk taking Result:Failures and risky loans Later Stages:Regulatory Forbearance1.Regulators allow insolvent banks to operate becauseA.Insufficient funds B.Sweep problems under rug7 2005 Pearson Educat

9、ion Canada Inc.Political Economy ofthe Banking CrisisExplanation:Principal-Agent Problem1.Politicians influenced by bank lobbyists rather than publicA.Deny funds to close banksB.Legislation to relax restrictions2.Regulators influenced by politicians and desire to avoid blameA.Loosened capital requir

10、ementsB.Regulatory restrictions on risky asset holdingsC.Regulatory forbearance8 2005 Pearson Education Canada Inc.CDIC DevelopmentsCDIC insures each depositor at member institutions up to a loss of$60 000 per account All federally incorporated financial institutions and all provincially incorporate

11、d TMLs are members of the CDICInsurance companies,credit unions,caisses populaires,and investment dealers are not eligible for CDIC membershipQDIB insures provincially incorporated institutions in Qubec and the other provinces have deposit insurance corporations that insure the deposits of credit un

12、ions in their jurisdictionCDIC insures only deposits in Canadian currency and payable in Canada;foreign currency deposits are not insuredNot all deposits and investments offered by CDIC member institutions are insurable 9 2005 Pearson Education Canada Inc.Not All Deposits Are InsurableInsurable depo

13、sits includeSavings and chequing accountsTerm deposits with a maturity date 5 yearsT-bills,bonds and debentures issued by governments and corporations(including the chartered banks)Investments in stocks,mutual funds,and mortgages.10 2005 Pearson Education Canada Inc.Differential Premiums By-Law11 20

14、05 Pearson Education Canada Inc.Opting-Out By-LawPermits Schedule III banks,that accept primarily wholesale deposits(defined as$150 000 or more),to opt out of CDIC membership and therefore to operate without deposit insuranceIt requires,however,an opted-out bank to inform all depositors,by posting n

15、otices in its branches,that their deposits will not be protected by the CDIC,and not to charge any early withdrawal penalties for depositors who choose to withdrawImplications:Minimizes CDIC exposure to uninsured depositsBy compensating only the insured depositors rather than all depositors,this leg

16、islation increases the incentives of uninsured depositors to monitor the risk-taking activities of banks,thereby reducing moral hazard risk 12 2005 Pearson Education Canada Inc.Evaluating CDIC Limits on Scope of Deposit Insurance1.Eliminate deposit insurance entirely2.Lower limits on deposit insuran

17、ce3.Eliminate too-big-to-fail4.CoinsurancePrompt Corrective Action1.Critics believe too many loopholes2.However:accountability increased by mandatory review of bank failure resolutionsRisk-based Insurance Premiums1.Hard to implementOther Proposed Changes1.Regulatory consolidation2.Market-value accounting13 2005 Pearson Education Canada Inc.Banking Crises Worldwide14 2005 Pearson Education Canada Inc.Cost of Banking Crises in Other Countries15 2005 Pearson Education Canada Inc.