| Project/Area Number |
11630010
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| Research Category |
Grant-in-Aid for Scientific Research (C)
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| Allocation Type | Single-year Grants |
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| Section | 一般 |
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| Research Field |
経済理論
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| Research Institution | KYOTO UNIVERSITY |
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Principal Investigator |
OSANO Hiroshi Kyoto University, Kyoto Institute of Economic Research, Professor, 経済研究所, 教授 (90152462)
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| Project Period (FY) |
1999 – 2000
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| Project Status |
Completed (Fiscal Year 2000)
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| Budget Amount *help |
¥900,000 (Direct Cost: ¥900,000)
Fiscal Year 2000: ¥500,000 (Direct Cost: ¥500,000)
Fiscal Year 1999: ¥400,000 (Direct Cost: ¥400,000)
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| Keywords | Bank Bailout / Cash Injection / Financial Crisis / Deposit Insurance / メカニズム・デザイン / 流動性危機 / 公的資金注入 / モラル・ハザード |
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| Research Abstract |
Under the incomplete contract framework, we consider an optimal regulatory policy for motivating bank equity owners and bank managers to restructure the bad loans of their banks in the presence of managerial compensation contracts with stock options. The regulatory policy studied in this paper is mainly concerned with the design of repayment schedules in the scheme of injection of cash funds into insolvent banks by the regulator. We show that the regulator cannot necessarily attain the social optimal allocation by injecting cash funds into insolvent banks through the purchase of subordinated bonds with the risk-free interest rate. However, even in that case, we also suggest that, if the regulator injects cash funds into active restructuring banks through the purchase of subordinated bonds or preferred stocks with less stringent repayment conditions and nationalizes passive restructuring banks, the regulator can attain the social optimal allocation by performing such a non-linear injection scheme under certain conditions.
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