We find that regulators can implement identical rules inconsistently due to differences in their institutional design and incentives, and this behavior may adversely impact the effectiveness with which regulation is implemented. We study supervisory decisions of U.S. banking regulators and exploit a legally determined rotation policy that assigns federal and state supervisors to the same bank at exogenously set time intervals. Comparing federal and state regulator supervisory ratings within the same bank, we find that federal regulators are systematically tougher, downgrading supervisory ratings almost twice as frequently as do state supervisors. State regulators counteract these downgrades to some degree by upgrading more frequently. Under federal regulators, banks report worse asset quality, higher regulatory capital ratios, and lower return on assets. Leniency of state regulators relative to their federal counterparts is related to costly outcomes, such as higher failure rates and lower repayment rates of government assistance funds. The discrepancy in regulator behavior is related to different weights given by regulators to local economic conditions and, to some extent, differences in regulatory resources. We find no support for regulator self-interest, which includes “revolving doors” as a reason for leniency of state regulators

I. Introduction, 503. — II. Factors behind the recent mergers, 504. — III. Government regulation of bank mergers, 519. — IV. Effects of mergers upon banking markets, 524. — V. Conclusions, 531

We study the scope for international cooperation in macroprudential policies. Multinational banks contribute to and are affected by fire sales in countries they operate in. National governments setting quantity regulations noncooperatively fail to achieve the globally efficient outcome, underregulating domestic banks and overregulating foreign banks. Surprisingly, noncooperative national governments using revenue-generating Pigouvian taxation can achieve the global optimum. Intuitively, this occurs because governments internalize the business value of foreign banks through the tax revenue collected. Our theory provides a unified framework to think about international bank regulations and yields concrete insights with the potential to improve on the current policy stance

This paper develops a model that speaks to the goals and methods of financial-stability policies. There are three main points. First, from a normative perspective, the model defines the fundamental market failure to be addressed, namely that unregulated private money creation can lead to an externality in which intermediaries issue too much short-term debt and leave the system excessively vulnerable to costly financial crises. Second, it shows how in a simple economy where commercial banks are the only lenders, conventional monetary-policy tools such as open-market operations can be used to regulate this externality, while in more advanced economies it may be helpful to supplement monetary policy with other measures. Third, from a positive perspective, the model provides an account of how monetary policy can influence bank lending and real activity, even in a world where prices adjust frictionlessly and there are other transactions media besides bank-created money that are outside the control of the central bank

Regulations prohibiting the payment of explicit interest on demand deposits are gradually being eased. As banks switch from payment in the form of free services to explicit interest, both the level of money demand and the response of money demand to market interest rates will change. Banks are modeled here as being Chamberlinian monopolistic competitors. Equilibrium deposit interest rate relationships are found for markets both with and without an effective interest rate ceiling and the behavior of the two markets is compared. The elimination of deposit interest rate ceilings leads to increased money demand and an increased responsiveness of deposit rates to market interest rates

Oklahoma (continued). Failure of Columbia Bank and Trust Co. Payment of depositors begun at once, 330. — Outcome of the liquidation, 332. — Other failures, 334. — How far deposit insurance caused the failure, 336. — How far politics entered, 338. — A serious question: the size of single risks, 340. — Desirability of postponing payment until after liquidation, 341. — Few conversions into national banks, 342. — Conclusion as to Oklahoma, 343. — Kansas. Unsuccessful bill of 1898, 344. — Act of 1909, 346. — National banks, not being allowed to participate, form a Guaranty Company, 349. — Legal complications: the constitutionality of the act questioned, 352. — Working of the act thus far, 355. — Nebraska. Act of 1909, 356. — Held unconstitutional by Circuit Court, and not in effect pending appeal, 357. — South Dakota. Abortive act of 1909, 359. — Texas. Act of 1909. Nominal option between guaranty and an indemnity bond, 362. — Other provisions, 363. — Guaranty plan generally followed, 365. — General regulation of banking, 366. — Effects of the act, 366. — Colorado. Unique and interesting bill, but no law enacted, 368. — Missouri. Attempts at legislation failed, 369. Deposit Insurance by Private Corporations, 370. — Proposals and possibilities, 371, 372. General arguments and conclusions, 373. — Chief purposes of deposit insurance, 373–376. — Objections: unnecessary? Failures, tho rare, are bad, 376. — Depositors cannot pick good banks, 377. — Would insurance bring impossible conditions? 378. — Undue liberality in interest on deposits? 379. — Fictitious loans? 380. — Undue expansion? 381. — No surplus accumulated? 382. — Unfair in taxing good banks? 383. — Premiums inadequate? 383. — State-administered vs. private insurance, 386. — The immediate future and the ultimate possibilities, 388

Revived interest in small denominations, 257. — The greenback period, 258. — Regulation of denominations in greenback laws, 259. — In the national banking law, 260. — Silver dollars and silver certificates under the Bland-Allison act, 262. — The Silver Purchase act of 1890, 263. — Table, 264. — Treasury notes of 1890, 266. — Developments after repeal of Silver Purchase act, 268. — Gold standard law of 1900, 269. — Developments after 1900, 271. —Act of March 4, 1907, 272. — Discretion granted to national banks, 1917, 276

Historically, lenders have been accused of “redlining” minority neighborhoods as well as refusing to lend to minority applicants. Considerable bank regulation is designed to prevent both actions. However, the strong correlation between race and neighborhood makes it difficult to distinguish the impact of geographic discrimination from the effects of racial discrimination. Previous studies have failed to untangle these two influences, in part, because of severe omitted variable bias. The data set in this paper allows the distinct effects of race and geography to be identified, and it shows that the evidence for redlining is weak