On banking and intermediation

Jean Tirole*

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

11 Scopus citations


The purpose of this lecture is to develop a framework for the study of prudential regulation and to derive policy implications. Following a discussion of the practice of banking supervision and of the raison d'être of regulation, the paper emphasizes the importance of capital adequacy and balance sheet adjustments to shocks affecting either individual banks or the banking sector as a whole. The ideas are then applied to the policy debates on market value accounting and on the indexation of the capital requirements to the business cycle. The paper concludes with political economy questions and with a discussion of the 'too-big-to-fail' problem.

Original languageEnglish (US)
Pages (from-to)469-487
Number of pages19
JournalEuropean Economic Review
Issue number3-4
StatePublished - Apr 1994
Externally publishedYes


  • Bank failures
  • Banking regulation
  • Capital requirements
  • Governance
  • Market value accounting

ASJC Scopus subject areas

  • Finance
  • Economics and Econometrics


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