This study investigates if the Troubled Asset Relief Program (TARP) distorted price competition in U.S. banking …

A growing body of literature indicates that competition increases bank soundness. Applying an industrial organization … bank soundness. We find evidence that competition robustly increases bank soundness, via the efficiency channel. … role in the transmission from competition to soundness. We use a two-pronged approach. First, we employ Granger causality …

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

How do real interest rates affect financial fragility? We study this issue in a model in which bank borrowing is subject … to rollover risk. A bank’s optimal borrowing trades off the benefit from investing additional funds into profitable assets … with the cost of greater risk of a run by bank creditors. Changes in the interest rate affect the price and amount of …

We develop a structural model for valuing bank balance sheet components such as the equity and debt value, the value … for the government when the bank is operated by private shareholders including the present value of a possible future … the bank. In this case, the shareholders lose part (or all) of the capital that they hold in the bank, the creditors lose …

The paper proposes a framework for assessing the impact of system-wide and bank-level capital buffers. The assessment … rests on a factor-augmented vector autoregression (FAVAR) model that relates individual bank adjustments to macroeconomic … related to an increase in bank resilience to adverse shocks. Higher capitalisation allows banks to withstand negative shocks …