Bank regulation and market structure
研究了提高资本要求如何改变受监管银行的市场结构，从垄断竞争转向寡头垄断甚至地方垄断，并可能促使存款者转向影子银行，反而增加银行风险。
In our model, banks, heterogeneous in terms of entry costs, compete à la Salop for depositors on the unit circle. When capital requirements, intended to prevent risk shifting, are increased, the resulting costs are passed on to depositors in the form of reduced deposit rates or quality of service. This may induce depositors to migrate to unregulated shadow banks, the consequence being a change in the market structure for regulated banks: for low levels of capital requirements we observe monopolistic competition, while for higher levels constrained oligopoly and, finally, local monopoly. Under the latter two types of market structure, higher capital requirements reduce the profit margins and franchise values of banks, which may have the unintended effect of inducing banks to increase the riskiness of their investments.