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Analysis of Banking Supervision via Inspection Game and Agent-Based Modeling
Last modified: 2012-07-16
Abstract
Banks have exceedingly important role in economy and are therefore often meticulously regulated and supervised. This paper examines relationship between banks and banking supervisors and explores how supervisors can adapt their strategy and be more efficient in achieving supervisory goals. The relationship is evaluated from game theoretic perspective and an agent-based model of banks’ and supervisors’ behavior and interaction is created. Computer simulation of the model is constructed in NetLogo environment, results are presented and conclusions are drawn.