Abstract

http://ssrn.com/abstract=969861
 
 

References (47)



 
 

Citations (1)



 


 



Financial Globalization and the Governance of Domestic Financial Intermediaries


Thierry Tressel


International Monetary Fund (IMF) - Research Department

Thierry Verdier


Paris School of Economics (PSE); Delta - Ecole Normale Superieure (ENS); Centre for Economic Policy Research (CEPR)

March 2007

IMF Working Paper No. 07/47

Abstract:     
We model an economy in which domestic banks and firms face incentive constraints, as in Holmstrom and Tirole (1997). Firms borrow from banks and uninformed investors, and can collude with banks to reduce the intensity of monitoring. We study the general equilibrium effects of capital flows (portfolio investments and loans, FDI) on the governance of domestic banks. We find that liberalization of capital flows may deteriorate the governance of the domestic financial system by increasing firms' incentives to collude with banks, with negative effects on productivity. We also show that systemic bailout guarantees increase the risks of collusion.

Number of Pages in PDF File: 59

Keywords: Globalization, Governance, Banking

JEL Classification: F3, F43, G21, O16, O42

working papers series


Download This Paper

Date posted: March 13, 2007  

Suggested Citation

Tressel, Thierry and Verdier, Thierry, Financial Globalization and the Governance of Domestic Financial Intermediaries (March 2007). IMF Working Papers, Vol. , pp. 1-57, 2007. Available at SSRN: http://ssrn.com/abstract=969861

Contact Information

Thierry Tressel (Contact Author)
International Monetary Fund (IMF) - Research Department ( email )
700 19th Street NW
Washington, DC 20431
United States
Thierry Verdier
Paris School of Economics (PSE) ( email )
48 Boulevard Jourdan
Paris, 75014
France
Delta - Ecole Normale Superieure (ENS) ( email )
48, Boulevard Jourdan
75014 Paris
France
+33 1 4313 6308 (Phone)
+33 1 4313 6310 (Fax)
Centre for Economic Policy Research (CEPR)
77 Bastwick Street
London, EC1V 3PZ
United Kingdom
Feedback to SSRN


Paper statistics
Abstract Views: 987
Downloads: 158
Download Rank: 109,150
References:  47
Citations:  1

© 2014 Social Science Electronic Publishing, Inc. All Rights Reserved.  FAQ   Terms of Use   Privacy Policy   Copyright   Contact Us
This page was processed by apollo7 in 0.235 seconds