This paper addresses the trade-off between additional loss-absorbing capacity and potentially higher bank risk …

consequences of the liquidity stress to the solvency ratio; (ii) quantify the liquidity deficit that a central bank should …

. Second, while higher bank capital requirements decrease default risk and funding costs, they make it also more profitable to …

contagion which can be used to calibrate bank-specific capital and liquidity requirements and large exposures limits. We find … non-linear function of the combination of network structures and bank-specific characteristics …

Loan guarantees represent a form of government intervention to support bank lending. However, their use raises concerns … as to their effect on bank risk-taking incentives. In a model of •nancial fragility that incorporates bank capital and a … bank incentive problem, we show that loan guarantees reduce depositor runs and improve bank underwriting standards, except …