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Collection: Economics Working Papers Archive
Bank management can change its charter and so its supervisor(s) at any time. Some argue that the supervisory competition resulting from the existence of the charter flip option promotes more efficient bank regulation. Others assert that it leads to "competition in laxity" as supervisors compete for clientele. Research on this issue is warranted because little empirical research on charter flips is available and the frequency of flips appears to have risen during the past decade.