Showing results 1 - 3 of 3
| Lucy White
Rules Versus Discretion in Bank Resolution. Lucy White, June 12, 2015, Paper. "We analyze the problem of a bank regulator who has the power to ‘bail in’ the debt of troubled banks, as is implied by newly designed bank resolution regimes. Allowing regulators to use their discretion in resolving banks permits them to act on the basis of their more precise, private information. However, regulators with discretion end up being excessively weak in…
| Lucy White
Good cop, bad cop: Complementarities between debt and equity in disciplining management, Lucy White, October 2014, Paper. "We demonstrate an inherent conflict between ex ante efficient monitoring and liquidation decisions by outside claimholders. We show it can be useful to commit to inefficient liquidation when monitors fail to produce information: this provides stronger incentives to monitor. The implication for firm capital structure is that…
| Lucy White
Reputational Contagion and Optimal Regulatory Forbearance. Lucy White, August 30, 2013, Paper. "Existing studies suggest that systemic crises may arise because banks either hold correlated assets or are connected by interbank lending. This paper shows that common regulation is also a conduit for interbank contagion. One bank's failure may undermine confidence in the banking regulator's competence, and, hence, in other banks chartered by the same…