The Prudential Regulation of Banks
by Mathias Dewatripont and Jean Tirole
The Dewatripont-Tirole book makes an important point about moral hazard: that depositors are not in a position to monitor their bank to make sure it is investing their money in a responsible way. This generates a role for regulation.
Recommendations from our site
“The Dewatripont-Tirole book makes an important point about moral hazard: that depositors are not in a position to monitor their bank to make sure it is investing their money in a responsible way.” Read more...
Economic Theory and the Financial Crisis: A Reading List
Eric Maskin, Economist
