Leora Klapper

Luc Laeven

"Using a comprehensive database of firms in Western and Eastern Europe, we study how the business environment in a country drives the creation of new firms. Our focus is on regulations governing entry. We find entry regulations hamper entry, especially in industries that naturally should have high entry. Also, value added per employee in naturally "high entry" industries grows more slowly in countries with onerous regulations on entry. Interestingly, regulatory entry barriers have no adverse effect on entry in corrupt countries, only in less corrupt ones. Taken together, the evidence suggests bureaucratic entry regulations are neither benign nor welfare improving. However, not all regulations inhibit entry. In particular, regulations that enhance the enforcement of intellectual property rights or those that lead to a better developed financial sector do lead to greater entry in industries that do more R & D or industries that need more external finance"--National Bureau of Economic Research web site.

Evidence from International Data

Business Environment and Firm Entry

Xavier Freixas

Jose-Luis Peydro

A framework for macroprudential regulation that defines systemic risk and macroprudential policy, describes macroprudential tools, and surveys the effectiveness of existing macroprudential regulation. The recent financial crisis has shattered all standard approaches to banking regulation. Regulators now recognize that banking regulation cannot be simply based on individual financial institutions' risks. Instead, systemic risk and macroprudential regulation have come to the forefront of the new regulatory paradigm. Yet our knowledge of these two core aspects of regulation is still limited and fragmented. This book offers a framework for understanding the reasons for the regulatory shift from a microprudential to a macroprudential approach to financial regulation. It defines systemic risk and macroprudential policy, cutting through the generalized confusion as to their meaning; contrasts macroprudential to microprudential approaches; discusses the interaction of macroprudential policy with macroeconomic policy (monetary policy in particular); and describes macroprudential tools and experiences with macroprudential regulation around the world. The book also considers the remaining challenges for establishing effective macroprudential policy and broader issues in regulatory reform. These include the optimal size and structure of the financial system, the multiplicity of regulatory bodies in the United States, the supervision of cross-border financial institutions, and the need for international cooperation on macroprudential policies.

Systemic Risk, Crises, and Macroprudential Regulation

The author aims to provide guidelines for the pricing of deposit insurance in different countries. He presents several methodologies that can be used to set benchmarks for the pricing level of deposit insurance in a country, and quantifies how specific design features affect the cost of deposit insurance. The author makes several contributions to our understanding of what drives the price of deposit insurance. For example, he shows how risk diversification and risk differentiation within a deposit insurance system can reduce the price of deposit insurance. The author also finds that deposit insurance is under-priced in many countries around the world, notably in several developing countries. More important, his estimates suggest that many countries cannot afford deposit insurance. Deposit insurance is unlikely to be a viable option in a country with weak banks and institutions. The author does not recommend a funded deposit insurance scheme, but rather he argues that for countries that have adopted or are adopting deposit insurance and have decided to pre-fund it, pricing it as accurately as possible is important.

Pricing of Deposit Insurance

Stijn Claessens

A Reader in International Corporate Finance offers an overview of current thinking on six topics: law and finance, corporate governance, banking, capital markets, capital structure and financing constraints, and the political economy of finance. This collection of 23 of the most influential articles published in the period 2000-2006 reflects two new trends:interest in international aspects of corporate finance, particularly specific to emerging markets, awareness of the importance of institutions in explaining global differences in corporate finance."In the last decade, financial economis.

Luc Laeven

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