Under Basel III rules, banks become subject to a liquidity coverage ratio (LCR) from 2015 onwards, to promote short …-term resilience. We investigate the effects of such liquidity regulation on bank liquid assets and liabilities. Results indicate co …-integration of liquid assets and liabilities, to maintain a minimum short-term liquidity buffer. Still, microprudential regulation …

asymmetric information the banks face the risk of adverse selection. Credit Value-at-Risk (CVaR) regulation counters the problem …Banks provide risky loans to firms which have superior information regarding the quality of their projects. Due to … of low quality, i.e. high risk, loans and therefore reduces the risk of the bank loan portfolio. However, CVaR regulation …

(NMS) are highly dependent on a few West-European banks and thus vulnerable to contagion effects. The Nordic and Baltic … financial crisis had such a large impact on European banks. …

this environment deposit-taking banks are not necessary for the efficient provision of liquidity. Mutual funds are … constrained efficient when supplemented with the same government liquidity regulation that is required to make a banking system …I revisit the Diamond-Dybvig model of liquidity insurance in the presence of hidden trades. The key result is that in …

-in-advance constraints, bank deposits are created through disbursement of bank loans, and banks face a convex lending cost. At the zero lower … bound on deposit rates (ZLBD), changes in policy rates affect activity through both real interest rates and banks’ net …

We study the effects of a bank’s engagement in trading. Traditional banking is relationship-based: not scalable, long … leads trading in banks to become increasingly risky, so that problems in managing and regulating trading in banks will … persist for the foreseeable future. The analysis has implications for capital regulation, subsidiarization, and scope and …

global games methodologies. Contingent convertible bonds are meant to act as a bail-in mechanism for banks, where CoCo debt …

We empirically investigate why wholesale funding is fragile by providing the first study of how individual banks borrow …, we find that banks with low credit worthiness replace unsecured borrowing with secured loans. Moreover, riskier lenders … provide more secured loans to replace unsecured lending, which is not consistent with speculative or precautionary liquidity …

Under the new Capital Accord, banks choose between two different types of risk management systems, the standard or the … standard approach subsequent to becoming regulated, i.e., the presence of regulation may induce a bank to decrease the quality …

We investigate actual capital chosen by banks in presence of capital minimum requirements and ex-post penalties for …