. Encumbering assets allows a bank to raise cheap secured debt and expand profitable investment, but it also concentrates risk on …How does asset encumbrance affect the fragility of intermediaries subject to rollover risk? We offer a model in which a … bank issues covered bonds backed by a pool of assets that is bankruptcy remote and replenished following losses …

. Encumbering assets allows a bank to raise cheap secured debt and expand profitable investment, but it also concentrates risk on …How does asset encumbrance affect the fragility of intermediaries subject to rollover risk? We offer a model in which a … bank issues covered bonds backed by a pool of assets that is bankruptcy remote and replenished following losses …

, funding costs, and prudential regulation. A bank's choice of encumbrance trades off the benefit of expanding profitable …We propose a model of asset encumbrance by banks subject to rollover risk and study the consequences for fragility … and revenueneutral Pigouvian taxes can mitigate the risk-shifting incentives of banks. …

We present a simple model to study the risk sensitivity of capital regulation. A banker funds investment with uninsured … banks attract cheaper deposit funding and require less capital. With a noisy signal, risk-sensitive capital regulation can … deposits and costly capital, where capital resolves a moral hazard problem in the banker's choice of risk. Investors are …

regulations, we develop a parsimonious model of bank and market lending in domestic and foreign currency and derive four …

are risk-free and liquid in a secondary market, while uninsured loans are subject to adverse selection. Loan insurance … reduces the amount of lemons traded in the secondary market for uninsured loans and improves liquidity and welfare. This …

runs, and face a threat of entry. Higher competition increases deposit rates and bank fragility, resulting in an … intermediate socially optimal level of bank competition. We provide a novel theory of bank opacity. The cost of opacity is more … is to deter entry of competitors, which increases bank charter value. Banks can be excessively opaque, motivating …

subject to rollover risk. A bank's optimal borrowing trades off the benefit from investing additional funds into profitable … assets with the cost of greater risk of a run by bank creditors. Changes in the interest rate affect the price and amount of …How do real interest rates affect financial fragility? We study this issue in a model in which bank borrowing is …

loans before maturity when in need of liquidity. Loan guarantees improve market liquidity and reduce lending standards, with … market liquidity of these loans due to both selection and commitment. Because of this positive pecuniary externality …

subject to rollover risk. A bank's optimal borrowing trades off the benefit from investing additional funds into profitable … assets with the cost of greater risk of a run by bank creditors. Changes in the interest rate affect the price and amount of …How do real interest rates affect financial fragility? We study this issue in a model in which bank borrowing is …