Competition vs Cooperation: What Are the Downsides of Banking Regulation? ...Middle East

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Competition vs Cooperation: What Are the Downsides of Banking Regulation?
In this article, we discuss moral hazard and regulatory measures, such as capital requirements, to stave off a banking crisis. We then introduce a model we have developed where we analyze the trade-off between competition to attract depositors and cooperation to enhance liquidity. We evaluate different policy tools with the objective of promoting financial stability.

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