In this paper, we analyze the role bank capital played in systemic banking crises and in lending expansion and contraction for nearly 150 years in Spain. We first build a measure of capital ratio (i.e., the capital to assets ratio) for Spain's banking sector, starting in 1880. Then, we analyze...

In addition to monetary policy, macroprudential policy can be fundamentally used by countries to contain risks threatening the stability of their financial systems. As macroprudential policy becomes more important, European countries have also begun to consider the establishment of national...