This article studies the links between financial stability and the architecture of financial
systems. We review the existing literature and provide organizing frameworks for analyzing …

Traditional banking is built on four pillars: small and medium enterprise lending, insured
deposit taking, access to lender of last resort (LOLR), and prudential supervision. This article …

We explore how imperfect regulation enforcement affects the design of optimal
macroprudential policy. We study an open economy workhorse model of macroprudential …

The fact that money, banking, and financial markets interact in important ways seems self-
evident. The theoretical nature of this interaction, however, has not been fully explored. To …

We develop a dynamic model of optimal regulatory design of three regimes that deal with
distress of large, complex banking organizations. These regimes are 1) bailout, as under …

This paper studies optimal second-best corrective regulation, when some agents/activities
cannot be perfectly regulated. We show that policy elasticities and Pigouvian wedges are …

We prove that in competitive market economies with no insurance for idiosyncratic risks,
agents will always overinvest in illiquid long-term assets and underinvest in short-term liquid …

Tech-based SMEs are important subjects for achieving national innovation-driven
development, and it is crucial to study whether and how changes in the macro-institutional …

Liquidity requirements for commercial banks improve risk-sharing for depositors.
Nevertheless, shadow banks, issuing securities with lower liquidity, operate outside such …

We study the optimal design of financial safety nets under limited private credit, asking
whether and when it is optimal to restrict ex ante the set of investors that can receive public …