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On dividend restrictions and the collapse of the interbank market

Goodhart, Charles, Peiris, M. U., Tsomocos, D. P. and Vardoulakis, A. P. (2010) On dividend restrictions and the collapse of the interbank market. Annals of Finance, 6 (4). pp. 455-473. ISSN 1614-2446

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Identification Number: 10.1007/s10436-010-0147-5


Until recently, financial services regulation remained largely segmented along national lines. The integration of financial markets, however, calls for a systematic and coherent approach to regulation. This paper studies the effect of market based regulation on the proper functioning of the interbank market. Specifically, we argue that restrictions on the payout of dividends by banks can reduce their expected default on (interbank) loans, stimulate trade in this market and improve the welfare of consumers.

Item Type: Article
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Additional Information: © 2010 Springer
Divisions: Financial Markets Group
Subjects: H Social Sciences > HG Finance
Date Deposited: 14 Apr 2011 15:57
Last Modified: 20 Oct 2021 00:44

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