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dc.contributor.authorALLEN, Franklin
dc.contributor.authorCARLETTI, Elena
dc.contributor.authorMARQUEZ, Robert
dc.date.accessioned2016-03-15T13:45:58Z
dc.date.available2016-03-15T13:45:58Z
dc.date.issued2011
dc.identifier.citationReview of financial studies, 2011, Vol. 24, No. 4, pp. 983-1018
dc.identifier.issn1465-7368
dc.identifier.issn0893-9454
dc.identifier.urihttps://hdl.handle.net/1814/40146
dc.descriptionFirst published online: 23 November 2009
dc.description.abstractEmpirical evidence suggests that banks hold capital in excess of regulatory minimums. This did not prevent the financial crisis and underlines the importance of understanding bank capital determination. Market discipline is one of the forces that induces banks to hold positive capital. The literature has focused on the liability side. We develop a simple theory based on monitoring to show that discipline from the asset side can also be important. In perfectly competitive markets, banks can find it optimal to use costly capital rather than the interest rate on the loan to commit to monitoring because it allows higher borrower surplus.
dc.language.isoen
dc.relation.ispartofReview of financial studies
dc.titleCredit market competition and capital regulation
dc.typeArticle
dc.identifier.doi10.1093/rfs/hhp089
dc.identifier.volume24
dc.identifier.startpage983
dc.identifier.endpage1018
dc.identifier.issue4


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