future crises. The crisis is was the product of a ‘perfect storm’ bringing together a number of microeconomic and … agencies’ business model, the procyclical behaviour of leverage in much of the financial system and of the Basel capital … global liquidity creation by key central banks and, second, an ex-ante global saving glut, brought about by the entry of a …

This paper reports estimates of the long-run costs and benefits of banks funding more of their assets with loss … of the benefits from having banks use more equity no estimate of costs--however accurate--can tell us what the optimal … level of bank capital is. We use empirical evidence on UK banks to assess costs; we use data from shocks to incomes from a …

Fire sales that occur during crises beg the question of why sufficient outside capital does not move in quickly to take …

fire sales and foreign entry on banks' ex ante choice of liquid asset holdings, and the ex post resolution of crises. In a …, foreign entry reduces this incentive. We exhibit international evidence on foreign entry following crises and on banks' ex …Bank liquidity is a crucial determinant of the severity of banking crises. In this paper, we consider the effect of …

The paper analyzes a very stylized model of crises and demonstrates how the degree of strategic complementarity in the … liquidity risk and characterizes them. Both a solvency (leverage) and a liquidity ratio are required to control the …

We analyze securities trading by banks and the associated spillovers to the supply of credit. Empirical analysis has … been elusive due to the lack of securities register for banks. We use a unique, proprietary dataset that has the … investments of banks at the security level for 2005-2012 in conjunction with the credit register from Germany. Analyzing data at …

The paper studies risk mitigation associated with capital regulation, in a context where banks may choose tail risk … liability. Moreover, higher capital may have an unintended e¤ect of enabling banks to take more tail risk without the fear of …

the moral hazard problems connected with risk-taking by large banks counting on state bail outs. In this paper market …

and its episodic crises as drivers of macroeconomic outcomes has attracted fresh scrutiny from academics, policy makers …

by highlighting different types of risk and the role of leverage. By means of a simple model we show that competition can … affect portfolio risk, insolvency risk, liquidity risk, and systemic risk differently. The effect depends crucially on banks …' liability structure, on whether banks are financed by insured retail deposits or by uninsured wholesale debts, and on whether …