1. In some recent work, Gorton and Winton (1999) delineate what are the private and the social costs of bank capital in a general equilibrium model of bank regulation;I abstract from the micro-motives for banking
2. build a theory of bank capital based on the liquidity creation by banks, the costs of financial distress, and the incentive effects of capital on the banks' collection of loans. An alternative approach to bank regulation exploits the owner-manager conflict as in John;Rajan Diamond;Senbet and Saunders,2000
3. Shrinking;The Credit Lyonnais saga is covered in the Economist articles: "Discredit Lyonnais" (September,1992