米什金货币金融学(英文)PPT (11)

1、Chapter 11Economic Analysis of Banking Regulation 2005 Pearson Education Canada Inc. 2005 Pearson Education Canada Inc.11-2How Asymmetric InformationExplains Banking Regulation1. Government Safety Net and Deposit InsuranceA. Prevents bank runs due to asymmetric information: depositors cant tell good

2、 from bad banksB. Creates moral hazard incentives 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

3、 much risk taking 2005 Pearson Education Canada Inc.11-33. 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 tak

4、ers or crooks owning banksB. Reduces moral hazard by preventing risky activities5. New Trend: Assessment of Risk Management6. Disclosure RequirementsA. Better information reduces asymmetric information problemHow Asymmetric InformationExplains Banking Regulation 2005 Pearson Education Canada Inc.11-

5、43. Bank Capital RequirementsA. Reduces moral hazard: banks have more 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 pr

6、eventing risky activitiesC. New trend: Assessment of risk management5. Disclosure RequirementsA. Better information reduces asymmetric information problemHow Asymmetric InformationExplains Banking Regulation 2005 Pearson Education Canada Inc.11-5Major Banking Legislation in Canada11-6Major Banking L

7、egislation in Canada 2005 Pearson Education Canada Inc. 2005 Pearson Education Canada Inc.11-7Why 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 activ

8、ities were becoming more complicated. Regulators had neither the expertise nor the resources 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 in

9、solvent banks to operate becauseA. Insufficient funds B. Sweep problems under rug 2005 Pearson Education Canada Inc.11-8Political Economy ofthe Banking CrisisExplanation: Principal-Agent Problem1. Politicians influenced by bank lobbyists rather than publicA. Deny funds to close banksB. Legislation t

10、o relax restrictions2. Regulators influenced by politicians and desire to avoid blameA. Loosened capital requirementsB. Regulatory restrictions on risky asset holdingsC. Regulatory forbearance 2005 Pearson Education Canada Inc.11-9CDIC Developments CDIC insures each depositor at member institutions

11、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 insures provincially incorpora

12、ted 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 deposits and investments offe

13、red by CDIC member institutions are insurable 2005 Pearson Education Canada Inc.11-10Not All Deposits Are InsurableInsurable deposits includeSavings and chequing accountsTerm deposits with a maturity date 5 yearsT-bills, bonds and debentures issued by governments and corporations (including the char

14、tered banks)Investments in stocks, mutual funds, and mortgages. 2005 Pearson Education Canada Inc.11-11Differential Premiums By-Law 2005 Pearson Education Canada Inc.11-12Opting-Out By-LawPermits Schedule III banks, that accept primarily wholesale deposits (defined as $150 000 or more), to opt out o

15、f CDIC membership and therefore to operate without deposit insuranceIt 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 withdrawal penalties for depositors who choose

16、to withdrawImplications:Minimizes CDIC exposure to uninsured depositsBy 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, thereby reducing moral hazard risk 2005 Pears

17、on Education Canada Inc.11-13Evaluating CDIC Limits on Scope of Deposit Insurance1. Eliminate deposit insurance entirely2. Lower limits on deposit insurance3. Eliminate too-big-to-fail4. CoinsurancePrompt Corrective Action1. Critics believe too many loopholes2. However: accountability increased by mandatory review of bank failure resolution