This paper reports estimates of the long-run costs and benefits of banks funding more of their assets with loss … of the benefits from having banks use more equity no estimate of costs - however accurate - can tell us what the optimal … level of bank capital is. We use empirical evidence on UK banks to assess costs; we use data from shocks to incomes from a …

This study aims to explore how different capital ratios influence the risk-taking of large commercial banks of the USA …. The study collects the data from FDIC for commercial banks from 2003 to 2019. We use a two-step GMM method to manage the …-based capital ratios decreases the banks' risks. Empirical findings demonstrated a significant and positive association between non …

This paper presents a theory that explains why it is beneficial for banks to engage in circular lending activities on … the interbank market. Using a simple network structure, it shows that if there is a non-zero bailout probability, banks … interbank market before investing in loan portfolios. Therefore, banks are better able to attract funds from uninsured creditors …

unique collateral leverage channel, which cannot be replicated by standard capital requirements. Through this channel, banks …Bank leverage constraints can emerge from regulatory capital requirements as well as from central bank collateral … loans with tighter monitoring of firms. The collateral leverage channel can improve welfare beyond standard bank capital …

unintended consequence of LOLR facilities manifests itself as excess illiquid leverage in the financial sector, can make future …. While they did reduce traditional measures of leverage to varying degrees, they failed to reduce sufficiently their illiquid … leverage, which contributed to their failures or near failures. Several mechanisms to address this unintended consequence of …

banks had not previously faced. That is, they could invest bank capital in excess reserves and earn the "better than" risk … free rate or they could lend and earn a higher but riskier interest rate.This paper provides empirical evidence of banks …

We take issue with claims that the funding mix of banks, which makes them fragile and crisis-prone, is efficient … that banks' distress and default cause, such claims are invalid because banks have multiple small creditors and are unable … funding mix entails costs to society, such regulation actually helps create useful commitment for banks to avoid the …

We take issue with claims that the funding mix of banks, which makes them fragile and crisisprone, is efficient because … banks' distress and default cause, such claims are invalid because banks have multiple small creditors and are unable to … entails costs to society, such regulation actually helps create useful commitment for banks to avoid the inefficiently high …

College) gave the SUERF 2015 Annual Lecture on Capital and Banks. The conference focused on core aspects of banking reform …

College) gave the SUERF 2015 Annual Lecture on Capital and Banks. The conference focused on core aspects of banking reform …