Several recent studies have recommended greater reliance on subordinated debt as a tool to discipline bank risk taking …

risk-free rate has been attributed by some authors to frictions, transaction costs or durability. However, such frictions … risk-free rate. We find that time-separable preferences fail at all horizons, and none of the models perform well at the … more success matching the first and second moments of the observed risk-free rate. A major unresolved issue is to …