Staff Discussion Papers
Staff Working Papers
The author develops a dynamic model of banking competition to determine which capital instrument is most effective in disciplining banks' risk choice. Comparisons are conducted between equity, subordinated debentures (SD), and uninsured deposits (UD) as funding sources.
The author documents the use by Canadian banks of subordinated debt (SD) as a capital instrument.
The author develops a theoretical model of bank closure. The regulatory decision about bank failure consists of two parts: whether to close and how to close.