This paper discusses the relationship between bank size and risk-taking under Pillar I of the New Basel Capital Accord … pushes them towards higher risk-taking due to fiercer competition. This may even lead to higher aggregate risk in the economy. …

with construction firms or with retail firms would have produced substantially higher returns on equity with less risk … returns relative to risk, although banks were not necessarily a dominant part of some combinations. These findings suggest … authors stress that bank management contemplating diversification into the commercial sector must be selective about which …

enjoy a significant reduction in funding costs if affiliation with a bank extended the federal safety net for banks to cover …

in the deposit market and depressing other banks? margins. In contrast, the effects on the protected bank?s risk … main result is that the bail-out policy unambiguously leads to higher risk-taking at those banks that do not enjoy a bail …-out guarantee. The reason is that the prospect of a bail-out induces the protected bank to expand, thereby intensifying competition …

acquiring banks value profitable, high-growth, and low-risk targets. We also find that the strength of bank regulation and …We analyze the takeover premiums paid for a sample of European bank mergers between 1997 and 2007. We find that … supervision and of deposit insurance regimes in Europe has measurable effects on takeover pricing. Stricter bank regulatory …

This paper studies the impact of European bank mergers and acquisitions on changes in key safety and soundness measures … of both acquirers and targets. We find that capitalization, profitability, and liquidity show signs of statistically and … insurance funding regimes tend to result in positive postmerger changes in liquidity and performance. …

analyzes how compensation schemes change in reaction to anticipated bail-outs. If there is a risk-shifting problem, bail …-out expectations lead to steeper bonus schemes and even more risk-taking. If there is an effort problem, the compensation scheme … perceptions makes it optimal for a welfare-maximizing regulator to impose caps on bank bonuses. In contrast, raising managers …

levels of regulation. Bank sophistication leads to capture, and thus to worse regulatory decisions. …One explanation for the poor performance of regulation in the recent financial crisis is that regulators had been … due to their high degree of sophistication. Banks can search for arguments of differing complexity against regulation …

other banks' margins. In contrast, the effects on the protected bank's risk taking and on welfare depend on the transparency … unambiguously leads to higher risk-taking at those banks that do not enjoy a bail-out guarantee. The reason is that the prospect of … a bail-out induces the rotected bank to expand, thereby intensifying competition in the deposit market and depressing …

We analyze the relationship between bank size and risk-taking under the New Basel Capital Accord. Using a model with … to higher aggregate risk-taking. …