German banks experienced a merger wave throughout the 1990s. However, the success of bank mergers remains a continuous …

affect the likelihood and the timing of bank recovery. Severe regulatory measures increase both the likelihood of recovery … conditions also matter for bank recovery. Hence, concerted micro- and macro-prudential policies are key to facilitate distressed … bank recovery. …

-equations model that specifies the probability of a bailout and banks' risk taking.We identify the effect of expected bailout … probabilities on risk taking using exclusion restrictions based on regional political, supervisor, and banking market traits. The …-2006. The marginal effect of risk with respect to bailout expectations is 7.2 basis points. A change of bailout expectations by …

. Encumbering assets allows a bank to raise cheap secured debt and expand profitable investment, but it also concentrates risk on …How does asset encumbrance affect the fragility of intermediaries subject to rollover risk? We offer a model in which a … bank issues covered bonds backed by a pool of assets that is bankruptcy remote and replenished following losses …

conduct of unsupported banks after the program stopped in the fourth quarter of 2009. The risk premium required by depositors …

Markets Programme (SMP). Using detailed security holdings data at the bank level, we show that banks exposed to this …

, funding costs, and prudential regulation. A bank's choice of encumbrance trades off the benefit of expanding profitable …We propose a model of asset encumbrance by banks subject to rollover risk and study the consequences for fragility … and revenueneutral Pigouvian taxes can mitigate the risk-shifting incentives of banks. …

We present a simple model to study the risk sensitivity of capital regulation. A banker funds investment with uninsured … banks attract cheaper deposit funding and require less capital. With a noisy signal, risk-sensitive capital regulation can … deposits and costly capital, where capital resolves a moral hazard problem in the banker's choice of risk. Investors are …