... (20 04) for a discussion of the issue and a model of the IMF’s preferred creditor status to mitigate financial crises 24 Memorandum of Understanding between HM Treasury, the Bank of England, and the ... SHOCKS AND BANKING SUPERVISION i 111 inside the bank, i.e., between managers and shareholders Thus, in the first version of the model there are only two protagonists: the “banker” (who represents the ... Second, there are fundamental externalities between the CB, interbank markets, and the banking supervisor When supervision is not perfect, so that the insolvent bank cannot be detected, interbank...