deposits towards non-deposit liabilities. We find that unobserved time-invariant bank fixed effects are ultimately the most … important determinant of banks’ capital structures and that banks’ leverage converges to bank specific, time invariant targets. …

analysis is relevant to the debate on bank capital regulation, and complements Admati et al. (2010). In that paper we argued …, the effects of leverage reduction on bank managers or shareholders do not represent a social cost. In fact, we show that … to leverage reduction leads to social inefficiencies. The main beneficiaries from high leverage may be bank managers. The …

Bank capital regulation seems to be today's most accepted regulatory instrument. The reasoning is that limited …

disciplining role are based on inadequate theory lacking empirical support. We conclude that bank equity is not socially expensive …

behavior and risk sensitivity of a risk-neutral bank. The bank is exposed to credit risk and may use credit default swaps (CDS …) for hedging purposes. Regulation is found to induce the risk-neutral bank to behave in a more risk-sensitive way: Compared …. Under the Substitution Approach in Basel II (and III) a risk-neutral bank will over-, fully or under-hedge its total …

In this paper we review the actual operational data of an anonymous Central European Bank, using two approaches …

volatility of growth and profitability are bank-size dependent, and (iii) the relationship between growth and profitability of a … bank. Using a dynamic panel model estimated by GMM for a mixed sample of more than 1500 banks from 65 countries, we find no … evidence of persistence in bank growth. However, our findings suggest significant persistence in bank profitability. Moreover …