During the last 20 years, concepts taken from the fields of corporate finance and efficient contracting have thrown new light on issues of bank regulation. Corporate finance theory portrays regulation as a multiparty chain of asymmetrically informed principal-agent relationships (e.g., Kane, 1999). Optimal-contracting theory emphasizes the desirability of minimizing the coordination costs that these multiparty chains of agency contracts generate (Jensen and Meckling, 1975).