Today’s regulatory rules, especially the easily-manipulated measures of regulatory capital, have led to costly bank … failures. We design a robust regulatory system such that (i) bank losses are credibly borne by the private sector (ii …) systemically important institutions cannot collapse suddenly; (iii) bank investment is counter-cyclical; and (iv) regulatory …

creating counter-cyclical incentives for banks to raise capital, and so encourage bank lending in bad times. They avoid the …

-out hypothesis. Using a unique set of observations on lending volume at a London goldsmith bank, Hoare’s, we document the impact of …

ex-post aspect, in which the failure of a bank brings down a surviving bank as well, and second, the ex-ante aspect, in … which banks endogenously hold correlated portfolios increasing the likelihood of joint failure. When bank loan returns have … a systematic factor, the failure of one bank conveys adverse information about this systematic factor and increases the …

We use portfolio theory to quantify the efficiency of state-level sectoral patterns of production in the United States … (particularly) interstate liberalization of bank branching restrictions. This effect arises primarily from convergence in the …

This paper focuses on bank rescue packages and on the behaviour of troubled banks in light of rescue offers. A puzzling … feature of experience with banking crises is that in many cases policy authorities make offers of bank rescue, and banks are … reluctant to accept these offers. We study situations in which regulators have decided to offer bank rescue plans, and we show …

owners. Our analysis casts light on the real effects of bank deregulation, on the risk sharing function of banks, and on the … integration of bank markets. …