The recent financial turmoil and the bailouts of some large financial institutions in the US and Europe have raised major concerns that the increased size and complexity of financial institutions may give rise to negative ramifications for systemic risk. In this paper, we investigate whether...

How do government interventions such as blanket guarantees, liquidity support, recapitalizations, and nationalizations affect banking competition? This question is important because the pricing of banking products has implications for consumer welfare. Exploiting data for 124 countries that...

We use a unique dataset with bank clients’ security holdings for all German banks to examine how macroeconomic shocks affect asset allocation preferences of households and non-financial firms. Our analysis focuses on two alternative mechanisms which can influence portfolio choice: wealth...