米什金货币金融学(英文)PPT (11).ppt

1、,Chapter 11,Economic Analysis of Banking Regulation, 2005 Pearson Education Canada Inc., 2005 Pearson Education Canada Inc.,11-2,How Asymmetric InformationExplains Banking Regulation,1.Government Safety Net and Deposit Insurance A.Prevents bank runs due to asymmetric information: depositors cant tel

2、l good from bad banks B.Creates moral hazard incentives for banks to take on too much risk C.Creates adverse selection problem of crooks and risk-takers wanting to control banks D.Too-Big-to-Fail increases moral hazard incentives for big banks 2.Restrictions on Asset Holdings A.Reduces moral hazard

3、of too much risk taking, 2005 Pearson Education Canada Inc.,11-3,3.Bank Capital Requirements A.Reduces moral hazard: banks have more to lose when have higher capital B.Higher capital means more collateral for FDIC 4.Bank Supervision: Chartering and Examination A.Reduces adverse selection problem of

4、risk takers or crooks owning banks B.Reduces moral hazard by preventing risky activities 5.New Trend: Assessment of Risk Management 6.Disclosure Requirements A.Better information reduces asymmetric information problem,How Asymmetric InformationExplains Banking Regulation, 2005 Pearson Education Cana

5、da Inc.,11-4,3.Bank Capital Requirements A.Reduces moral hazard: banks have more to lose when have higher capital B.Higher capital means more collateral for CDIC 4.Bank Supervision: Chartering and Examination A.Reduces adverse selection problem of risk takers or crooks owning banks B.Reduces moral h

6、azard by preventing risky activities C.New trend: Assessment of risk management 5.Disclosure Requirements A.Better information reduces asymmetric information problem,How Asymmetric InformationExplains Banking Regulation, 2005 Pearson Education Canada Inc.,11-5,Major Banking Legislation in Canada,11-

7、6,Major Banking Legislation in Canada, 2005 Pearson Education Canada Inc., 2005 Pearson Education Canada Inc.,11-7,Why a Banking Crisis in 1980s?,Early Stages 1. Managers did not have the required expertise to manage risk 2.The existence of CDIC, more opportunities for risk taking 3. Because of the

8、lending boom, bank activities were becoming more complicated. Regulators had neither the expertise nor the resources to monitor these activities appropriately 4. i , net worth of banks A.Insolvencies B.Incentives for risk taking Result: Failures and risky loans Later Stages: Regulatory Forbearance 1

9、.Regulators allow insolvent banks to operate because A.Insufficient funds B.Sweep problems under rug, 2005 Pearson Education Canada Inc.,11-8,Political Economy ofthe Banking Crisis,Explanation: Principal-Agent Problem 1.Politicians influenced by bank lobbyists rather than public A.Deny funds to clos

10、e banks B.Legislation to relax restrictions 2.Regulators influenced by politicians and desire to avoid blame A.Loosened capital requirements B.Regulatory restrictions on risky asset holdings C.Regulatory forbearance, 2005 Pearson Education Canada Inc.,11-9,CDIC Developments,CDIC insures each deposit

11、or at member institutions up to a loss of $60 000 per account All federally incorporated financial institutions and all provincially incorporated TMLs are members of the CDIC Insurance companies, credit unions, caisses populaires, and investment dealers are not eligible for CDIC membership QDIB insu

12、res provincially incorporated institutions in Qubec and the other provinces have deposit insurance corporations that insure the deposits of credit unions in their jurisdiction CDIC insures only deposits in Canadian currency and payable in Canada; foreign currency deposits are not insured Not all dep

13、osits and investments offered by CDIC member institutions are insurable, 2005 Pearson Education Canada Inc.,11-10,Not All Deposits Are Insurable,Insurable deposits include Savings and chequing accounts Term deposits with a maturity date 5 years T-bills, bonds and debentures issued by governments and

14、 corporations (including the chartered banks) Investments in stocks, mutual funds, and mortgages., 2005 Pearson Education Canada Inc.,11-11,Differential Premiums By-Law, 2005 Pearson Education Canada Inc.,11-12,Opting-Out By-Law,Permits Schedule III banks, that accept primarily wholesale deposits (d

15、efined as $150 000 or more), to opt out of CDIC membership and therefore to operate without deposit insurance It requires, however, an opted-out bank to inform all depositors, by posting notices in its branches, that their deposits will not be protected by the CDIC, and not to charge any early withd

16、rawal penalties for depositors who choose to withdraw Implications: Minimizes CDIC exposure to uninsured deposits By compensating only the insured depositors rather than all depositors, this legislation increases the incentives of uninsured depositors to monitor the risk-taking activities of banks,

17、thereby reducing moral hazard risk, 2005 Pearson Education Canada Inc.,11-13,Evaluating CDIC,Limits on Scope of Deposit Insurance 1.Eliminate deposit insurance entirely 2.Lower limits on deposit insurance 3.Eliminate too-big-to-fail 4.Coinsurance Prompt Corrective Action 1.Critics believe too many loopholes 2.However: accountability increased by mandatory review of bank failure resolutions Risk