Ahnert, Toni; Anand, Kartik; König, Philipp Johann - 2022
subject to rollover risk. A bank's optimal borrowing trades off the benefit from investing additional funds into profitable … assets with the cost of greater risk of a run by bank creditors. Changes in the interest rate affect the price and amount of …How do real interest rates affect financial fragility? We study this issue in a model in which bank borrowing is …
