In spite of mounting losses banks continued to pay dividends during the crisis. We present a model that addresses this … behavior. By paying out dividends, a bank transfers value to its shareholders away from creditors, among whom are other banks …. This way, one bank's dividend payout policy affects the equity value and risk of default of other banks. When such negative …

unintended consequence of LOLR facilities manifests itself as excess illiquid leverage in the financial sector, can make future …. While they did reduce traditional measures of leverage to varying degrees, they failed to reduce sufficiently their illiquid … leverage, which contributed to their failures or near failures. Several mechanisms that might address this unintended …

The headline numbers appear to show that even as banks and financial intermediaries suffered large credit losses in the … banks to lend over this period. We draw conclusions on how capital regulation may be reformed in light of our findings. …

results are broadly consistent with the predictions of a benign view of the role of investment banks in advising acquisition … targets. Fees to investment banks are correlated with attributes of transactions and target firms in ways that make sense if … banks are being paid for processing information. The more contingent (and, therefore, risky) the fees, the higher they tend …