We study how investors account for the riskiness of banks' risk-weighted assets (RWA) by examining the determinants of … stock returns and market measures of risk. We find that banks with higher RWA had lower stock returns over the US and … European crises. This relationship is weaker in Europe where banks can use Basel II internal risk models. For large banks …

expectations about bank risk-taking and demand a return on deposits according to their risk. This creates strategic …' funding conditions and strengthening risk-taking incentives.Liquidity provision to banks may eliminate the good equilibrium …

to take on risk by reducing market discipline or by increasing charter value. We use an international sample of bank data … associated with more risk taking by banks, especially during the financial crisis (2009-10). We also find that restricting banks …

building a dynamic stochastic general equilibrium model linked to global climate and a catastrophe risk model specifically for … drawing strong conclusions about the relevance of climate risk, as the model focused only on typhoons’ physical capital …

Traditional theory suggests that more profitable banks should have lower risk-taking incentives. Then why did many … to reconcile theory and evidence. In our setup, banks are endowed with a fixed core business. They take risk by levering … core business allows a bank to borrow more and take side risks on a larger scale, offsetting lower incentives to take risk …

We examine how bank competition in the run-up to the 2007-2009 crisis affects banks' systemic risk during the crisis … competition at the industry level lead to higher realized systemic risk. The results suggest that the use of securitization … exacerbates the effects of market power on the systemic dimension of bank risk, while capitalization partially mitigates its …

credit activity, and heightened risk appetite attributable to the commodity boom are fuelling price volatility in asset …

Islamic and cooperative banks such as credit unions are broadly similar in that they both share some risk with savers …. However, risk sharing goes along with ownership control in cooperatives, whilst Islamic banks share risk with borrowers and … downside risk with depositors. Islamic banking is consistent with mutual ownership, which may ease some of the governance and …

-term oriented, with high implicit capital, and low risk (thanks to the law of large numbers). Trading is transactions …-based: scalable, shortterm, capital constrained, and with the ability to generate risk from concentrated positions. When a bank …-ante. And a bank may use trading for risk-shifting. Financial development augments the scalability of rading, which initially …