We investigate the relationship between real estate markets and bank distress amongGerman universal and specialized mortgage banks between 1995 and 2004. Higherhouse prices increase the value of collateral, which reduces the probability of bankdistress (PDs). But higher prices at given rents may...

Banks continue to dier in many ways, for instance with respect to business models,growth strategies, or nancial health. Neglecting these dierences confuses ine-ciency with heterogeneity while sub-sample estimation prohibits eciency comparisonsacross dierent samples. We use a latent class...

Evidence on the interdependency between monetary policy and the state of thebanking system is scarce. We suggest an integrated micro-macro approach with twocore virtues. First, we measure the probability of bank distress directly at the banklevel. Second, we integrate a microeconomic hazard...