Excessive credit creation by banks was at the root of the recent financial crisis. Nevertheless, micro …-prudential regulation lacks a clear methodology to identify these banks. Combining arguments from banking and auction theory, we show that …. Unlike traditional measures of (excessive) loan growth, our new measure identifies banks that are affected by abnormal loan …

In general, banks play a growth-enhancing role for the real economy. However, distorted incentives for banks …, depositors, and regulators in connection with bank insolvency may corrupt banks' credit allocation and monitoring decisions …, leading to suboptimal real economic outcomes. A rules-based prompt resolution regime for insolvent banks may reestablish the …

We adapt a theoretical model from the goods trade literature to test whether banks with a comparative cost advantage …-level data on the international activities of all German banks with publicly available bank micro data from possible destination … markets to show that the decision to go abroad is driven by relative cost differences. Banks enter markets where they are cost …