Our Research Focus

Financial Regulation

We study the impact of financial regulation on the financial sector and the broader economy. Our research covers a broad range of topics, including bank capital regulations, consumer regulations, and central bank lending. Our recent work has dealt with the size of the federal financial safety net, the influence of regulation on mortgage default rates, and bank runs.

To learn more about the safety net, which is supposed to protect large financial institutions and their creditors from failure and reduce "systemic risk" but may not do either, read the Richmond Fed's essay on the "too big to fail" problem in the "Our Perspective" series.

Issue Title Author(s)
Third Quarter 2013 MBS Real Estate Investment Trusts: A Primer Sabrina R. Pellerin
Steven Sabol
John R. Walter
Second Quarter 2013 Too Big to Manage? Two Book Reviews Edward S. Prescott
Fourth Quarter 2012 Regulation and the Composition of CEO Pay Arantxa Jarque
Brian Gaines
First Quarter 2012 Orderly Liquidation Authority as an Alternative to Bankruptcy Sabrina R. Pellerin
John R. Walter
First Quarter 2012 Contingent Capital: The Trigger Problem Edward S. Prescott
Second Quarter 2011 Legal Protection to Foreign Investors Juan Carlos Hatchondo
Leonardo Martinez
First Quarter 2011 Mortgage Reform and the Countercyclical Role of the Federal Housing Administration's Mortgage Mutual Insurance Fund Brent C Smith
Third Quarter 2010 How Large Has the Federal Financial Safety Net Become? Nadezhda Malysheva
John R. Walter
First Quarter 2010 Introduction to the Special Issue on the Diamond-Dybvig Model Edward S. Prescott
First Quarter 2010 Bailouts Edward J. Green
First Quarter 2010 On the Fundamental Reasons for Bank Fragility Huberto M. Ennis
Todd Keister
First Quarter 2010 Inside-Money Theory after Diamond and Dybvig Ricardo de O. Cavalcanti
First Quarter 2010 Monetary Theory and Electronic Money: Reflections on the Kenyan Experience William Jack
Tavneet Suri
Robert Townsend
Fall 2009 Dynamic Provisioning: A Countercyclical Tool for Loan Loss Reserves. Eliana Balla
Andrew McKenna
Spring 2009 The Consolidation of Financial Regulation: Pros, Cons, and Implications for the United States Sabrina R. Pellerin
John R. Walter
Patricia Wescott
Spring 2009 Should Increased Regulation of Bank Risk-Taking Come from Regulators or from the Market? Robert L. Hetzel
Winter 2008 Should Bank Supervisors Disclose Information About Their Banks? Edward S. Prescott
Winter 2008 Antitrust Analysis in Banking: Goals, Methods, and Justifications in a Changed Environment John R. Walter
Patricia E. Wescott
Fall 2006 Changes in the Size Distribution of U. S. Banks: 1960 - 2005 Hubert P. Janicki
Edward S. Prescott
Spring 2006 Can Feedback from the Jumbo CD Market Improve Bank Surveillance? R. Alton Gilbert
Andrew P. Meyer
Mark D. Vaughan
Winter 2006 The 3-6-3 Rule: An Urban Myth? John R. Walter
Spring 2005 Bank Risk of Failure and the Too-Big-to-Fail Policy Huberto M. Ennis
H. S. Malek
Winter 2005 Depression-Era Bank Failures: The Great Contagion or the Great Shakeout? John R. Walter
Fall 2004 Auditing and Bank Capital Regulation Edward S. Prescott
Winter 2004 Closing Troubled Banks: How the Process Works John R. Walter
Summer 2003 Accounting for Corporate Behavior John A. Weinberg
Spring 2003 Banking and Commerce: Tear Down This Wall? John R. Walter
Fall 2002 Competition Among Bank Regulators John A. Weinberg
Summer 2002 The Economics of Financial Privacy: To Opt Out or Opt In? Jeffrey M. Lacker
Spring 2002 What Can Price Theory Say about the Community Reinvestment Act? John R. Walter
Robert L. Lacy
Spring 2002 Can Risk-Based Deposit Insurance Premiums Control Moral Hazard? Edward S. Prescott
Fall 2001 On the Size Distribution of Banks Huberto M. Ennis
Summer 2001 Regulating Bank Capital Structure to Control Risk Edward S. Prescott
Winter 1999 A Primer on Moral-Hazard Models Edward S. Prescott
Summer 1998 The Bank Merger Wave: Causes and Consequences J. Alfred Broaddus, Jr.
Winter 1998 Can a Safety Net Subsidy Be Contained? John R. Walter
Winter 1997 The Pre-Commitment Approach in a Model of Regulatory Banking Capital Edward S. Prescott
Fall 1996 Firewalls John R. Walter
Spring 1996 Tie-in Sales and Banks John A. Weinberg
Fall 1995 Derivatives Debacles: Case Studies of Large Losses in Derivatives Markets Anatoli Kuprianov
Fall 1994 Were Bank Examiners Too Strict with New England and California Banks? John R. Walter
Robert M. Darin
Spring 1994 Choices in Banking Policy J. Alfred Broaddus, Jr.
Issue Title Author(s)
1991 Too Big to Fail: Origins, Consequences, and Outlook Robert L. Hetzel
1991 Loan Loss Reserves John R. Walter
1991 Reflections on Deposit Insurance Robert P. Black
1990 The Case for Interstate Branch Banking David L. Mengle
1990 Reforming Deposit Insurance: Lessons from the Savings and Loan Crisis Michael Dotsey
Anatoli Kuprianov
1989 The Future of Deposit Insurance: An Analysis of the Alternatives Anatoli Kuprianov
David L. Mengle
1989 Banking Under Changing Rules: The Fifth District Since 1970 David L. Mengle
1988 International Risk-Based Capital Standard: History and Explanation Malcolm C. Alfriend
1987 A Review of Bank Performance in the Fifth District, 1986 David L. Mengle
John R. Walter
1985 The Rules versus Discretion Debate over Monetary Policy in the 1920s Robert L. Hetzel
1985 The Monetary Control Act and the Role of the Federal Reserve in the Interbank Clearing Market Anatoli Kuprianov
1984 A Review of Bank Performance in the Fifth District, 1983 F. Ward McCarthy, Jr.
1984 The Evolution of the Bank Regulatory Structure: A Reappraisal F. Ward McCarthy, Jr.
1979 A Summary of the International Banking Act of 1978 John P. Segala
1978 Regulation Q and the Behavior of Savings and Small Time Deposits at Commercial Banks and the Thrift Institutions Timothy Q. Cook
1977 Bank Capital Adequacy: Perspectives and Prospects Bruce J. Summers
1976 FDIC Policy Toward Bank Failures Walter A. Varvel
1975 The Classical Concept of the Lender of Last Resort Thomas M. Humphrey
Paper Title Author(s)
May 2015
Did the Financial Reforms of the Early 1990s Fail? A Comparison of Bank Failures and FDIC Losses in the 1986-92 and 2007-13 Periods Eliana Balla
Edward S. Prescott
John R. Walter
February 2015
Fixed Prices and Regulatory Discretion as Triggers for Contingent Capital Conversion: An Experimental Examination Douglas Davis
Edward S. Prescott
January 2014
Does Greater Inequality Lead to More Household Borrowing? New Evidence from Household Data Olivier Coibion
Yuriy Gorodnichenko
Marianna Kudlyak
John Mondragon
August 2013
Are Young Borrowers Bad Borrowers? (Revised June 2014) Peter Debbaut
Andra C. Ghent
Marianna Kudlyak
March 2013
Banker Compensation and Bank Risk Taking: The Organizational Economics View Arantxa Jarque
Edward S. Prescott
December 2011
Loan Loss Reserves, Accounting Constraints, and Bank Ownership Structure Eliana Balla
Morgan J. Rose
November 2011
Contingent Capital: The Trigger Problem Edward S. Prescott
September 2011
Mortgage Defaults and Prudential Regulations in a Standard Incomplete Markets Model (Revised February 2014) Juan Carlos Hatchondo
Leonardo Martinez
Juan M. Sanchez
March 2011
An Experimental Analysis of Contingent Capital Triggering Mechanisms (Revised Oct. 2011) Douglas Davis
Edward S. Prescott
Oleg Korenok
October 2010
Optimal Bonuses and Deferred Pay for Bank Employees: Implications of Hidden Actions with Persistent Effects in Time Arantxa Jarque
Edward S. Prescott
May 2010
Housing Default: Theory Works and So Does Policy Allen C. Goodman
Brent C Smith
August 2009
Are Harsh Penalties for Default Really Better? Kartik B. Athreya
Xuan S. Tam
Eric R. Young
July 2009
Recourse and Residential Mortgage Default: Theory and Evidence from U.S. States (Revised June 2010) Andra C. Ghent
Marianna Kudlyak
May 2009
The Consolidation of Financial Market Regulation: Pros, Cons, and Implications for the United States Sabrina R. Pellerin
John R. Walter
Patricia E. Wescott
March 2007
Bank Runs and Institutions: The Perils of Intervention Huberto M. Ennis
Todd Keister
November 2006
Market-Based Regulation and the Informational Content of Prices Philip Bond
Itay Goldstein
Edward S. Prescott
July 2005
Should the FDIC Worry about the FHLB? The Impact of Federal Home Loan Bank Advances on the Bank Insurance Fund Rosalind L. Bennett
Mark D. Vaughan
Timothy J. Yeager
March 2004
Bank Runs and Investment Decisions Revisited Huberto M. Ennis
Todd Keister
February 2004
State-Contingent Bank Regulation With Unobserved Actions and Unobserved Characteristics David A. Marshall
Edward S. Prescott
September 2002
The Macroeconomics of U.S. Consumer Bankruptcy Choice: Chapter 7 or Chapter 13? Wenli Li
Pierre-Daniel G. Sarte
March 1999
Limited Commitment and Central Bank Lending Marvin Goodfriend
Jeffrey M. Lacker
June 1990
Costs and Technical Change: Effects from Bank Deregulation David B. Humphrey
October 1989
The Feasibility of Market Value Accounting for Commercial Banks David L. Mengle
May 1988
Legal and Regulatory Reform in Electronic Payments: An Evaluation of Finality of Payment Rules David L. Mengle
April 1988
Financial Deregulation, Monetary Policy, and Central Banking Marvin Goodfriend
Robert G. King
October 1987
The Economic Effects of Corporate Taxes in a Stochastic Growth Model Michael Dotsey
July 1976
Bank Management, Competition, and Interest Rates: A Portfolio Model of Discount Window Activity William D. Jackson
September 1974
Commercial Banking Performance and Structure: A Factor Analysis Approach William D. Jackson
May 1973
Simulations of Marginal Reserve Requirements on Large Denomination Certificates of Deposit in the FRB Model Philip H. Davidson
Essay Title Author(s)
March 2015
Explaining the Decline in the Number of Banks since the Great Recession Roisin McCord
Edward S. Prescott
Tim Sablik
December 2014
Understanding Market Failure in the 2007-08 Crisis Borys Grochulski
Wendy Morrison
February 2014
Reforming Money Market Mutual Funds: A Difficult Assignment Huberto M. Ennis
Renee Haltom
December 2013
How Risky Are Young Borrowers? Peter Debbaut
Andra C. Ghent
Marianna Kudlyak
Jessie Romero
September 2012
Can Orderly Liquidation Solve the Problems of Bailouts and Bankruptcies? Betty Joyce Nash
Sabrina R. Pellerin
John R. Walter
March 2012
Loan Loss Reserve Accounting and Bank Behavior Eliana Balla
Morgan J. Rose
Jessie Romero
April 2011
Identifying Systemically Important Financial Institutions David A. Price
John R. Walter
September 2010
The Effects of Local Demographic Characteristics and State-Level Legislation on Foreclosure Rates Ross Lawrence
Brent C Smith
June 2010
Now How Large Is the Safety Net? Jeffrey M. Lacker
John A. Weinberg
November 2009
Rolling Back the Financial Safety Net Robert L. Hetzel
Stephen Slivinski
September 2009
Deterring Default: Why Some State Laws Decrease the Probability of Mortgage Foreclosures Andra C. Ghent
Marianna Kudlyak
Stephen Slivinski
July 2009
Systemic Risk Regulation and the "Too Big to Fail" Problem Borys Grochulski
Stephen Slivinski
May 2009
The Costs and Benefits of Bank Supervisory Disclosure Edward S. Prescott
Stephen Slivinski