In this paper we study dollarization as a commitment device that the Central Bank could use to avoid getting involved in an undesirable banking-sector bailout. We show how a political process could induce an equilibrium outcome that differs from the one that a benevolent Central Bank would want...

Some U.S. banks may be perceived as too big to fail: If any such bank were to get into trouble, the market may expect a government bailout. In general, the possibility of contingent bailouts creates a risk and a size distortion in the decisions of banks. As a result, banks tend to become riskier...

In the last thirty years the U.S. commercial banking industry has experienced significant changes. Characterizing this transformation are long-run trends of the structure, balance sheet, and income statement of the industry. A review of these trends reveals that banks are still very important...

Important changes in U.S. banking regulation that took place during the nineties have inspired concern about the long-run size distribution of banks. The asset-size distribution of commercial banks is skewed to the right, and there has been a pronounced increase in asset concentration in the...

Large banking organizations were at the center of the recent financial crisis in the United States. Their role in the economy and how to regulate them has been the subject of active debate. We study the financial performance of U.S. bank holding companies with more than $10 billion in assets...