00000nam 2200000za 4500 9.847797 CaOODSP 20221107153524 cr ||||||||||| 171127s2017 oncd #ob f000 0 eng d CaOODSP eng eng fre n-cn--- FB3-5/2017-48E-PDF Carter, Thomas. Optimal interbank regulation [electronic resource] / by Thomas J. Carter. Ottawa : Bank of Canada, 2017. ii, 63 p. : graphs Bank of Canada staff working paper, 1701-9397 ; 2017-48 "November 2017." Includes bibliographical references. "Recent years have seen renewed interest in the regulation of interbank markets. A review of the literature in this area identifies two gaps: first, the literature has tended to make ad hoc assumptions about the interbank contract space, which makes it difficult to generate convincing policy prescriptions; second, the literature has tended to focus on ex-post interventions that kick in only after an interbank disruption has come underway (e.g., open-market operations, lender-of-last-resort interventions, bail-outs), rather than ex-ante prudential policies. In this paper, I take steps toward addressing both these gaps, namely by building a simple model for the interbank market in which banks optimally choose the form of their interbank contracts. I show that the model delivers episodes that qualitatively resemble the interbank disruptions witnessed during the financial crisis. Some important implications for policy then emerge. In particular, I show that optimal policy requires careful coordination between ex-post and ex-ante interventions, with the ex-ante component surprisingly doing most of the heavy lifting. This suggests that previous literature has underemphasized the role that ex-ante interventions have to play in optimal interbank regulation."--Abstract, p. ii. Text in English, abstract in English and French. gccst Banks gccst Regulations gccst International finance Bank of Canada. Staff working paper (Bank of Canada) 1701-9397 ; 2017-48. (CaOODSP)9.806221 PDF 890 KB https://publications.gc.ca/collections/collection_2017/banque-bank-canada/FB3-5-2017-48-eng.pdf