The Prudential Regulation Of Banks

"The Prudential Regulation of Banks" applies modern economic theory to prudential regulation of financial intermediaries. Dewatripont and Tirole tackle the key problem of providing the right incentives to management in banks by looking at how external intervention by claimholders (holders of equity or debt) affects managerial incentives and how that intervention might ideally be implemented. Their primary focus is the regulation of commercial banks and S&; Ls, but many of the implications of their theory are also valid for other intermediaries such as insurance companies, pension funds, and securities funds.