Publication

This paper examines banking as a regulated industry. The author assumes inequality of information among various participants as well as the existence of different incentives, and argues that regulation in general, and a safety net in particular, are necessary to make the financial service industry operate in a safe and appropriate fashion. From this vantage point, transition banking and, more closely, the peculiarities of the Serbian banking system are analyzed. The paper concludes with a set of guidelines for redesigning the existing safety net in Serbian banking.