We examine the optimal bank interest margin effects of the Gramm--Leach--Bliley Act (GLBA), particularly allowing commercial banks to engage in insurance underwriting. This article models bank equity explicitly integrating the Down-and-Out Call (DOC) option of insurance underwriting with the...

This article proposes a framework for bank default risk measure under government capital injection explicitly coinciding with an adverse signal that a rescued bank is expected to have significant future losses. A bank facing a serious problem of early closure may have a strong incentive to...

Previous research on market-based evaluation of bank equity with government bailout has modelled the bank as a corporate firm with risky assets and liabilities. No attempt was made to analyse explicitly equity quality expressed as a situation when the carrying value of the bank's equity book is...