... Banking and Finance 14(1):69–84.Gennotte, G., and D. Pyle. 1991. Capital controls and bank risk. Journal of Banking and Finance 15:805 24 .Gropp, R., J. Vesala, and G. Vulpes. 20 02. Equity and ... contingent on the level of risk chosen by the bank. Thenthey examine the complementarity between two policy instruments of bank regulators: the level of capital requirements and the intensity of supervision. ... by the imperfections of the fiscal system. When-ever the government intervenes, the level of recapitalization ∆x and the new assets value 24 of the bank 25 Vk,BO(for a technology k ∈{G, B}) are determined...