perquisites that yield private benefits). The privately optimal level of bank leverage is neither too low nor too high: It … substitution induced at high levels of leverage. However, when correlated bank failures can impose significant social costs …, governments may have no option but to bail out bank creditors. Anticipation of this generates an equilibrium featuring systemic …

importance of regulatory arbitrage as a driver of cross-border bank flows since the global financial crisis. However, in the euro …The paper analyzes the effects of changes to regulatory policy and to monetary policy on cross-border bank lending … since the global financial crisis. Cross-border bank lending has decreased, and the home bias in the credit portfolio of …

stringent bank regulation and supervision consistent with regulatory arbitrage, but that they prefer to originate loans in … institutional arrangements. Multinational banks' choices between loan origination through the parent bank or through a foreign …