equilibrium is characterized by a deep market with highly leveraged banks. The crisis times equilibrium is characterized by bank …

by the following types of bank financial distress: 1) low equity ratio; 2) low Tier 1 capital ratio; and 3) losses on …

This paper uses a unique dataset where credit rejections experienced by euro area firms are matched with firm and bank … characteristics. This allows us to study simultaneously the role that bank and firm weakness had in the credit reduction observed in … strong determinants of credit rejections, in the crisis period bank weakness made it harder to obtain external finance for …

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 …

We exploit the 2007-2009 financial crisis to analyze how risk relates to bank business models. Institutions with higher …. Business models related to significantly reduced bank risk were characterized by a strong deposit base and greater income …

This paper shows that a central bank can more efficiently mitigate economic crises when it broadens eligibility for its … bank to the arrival of the crisis and local default rates. We find that broad eligibility reduced significantly the … been 10% to 15% higher if the central bank would have implemented the strictest eligibility rule. This effect is identified …