Using a novel dataset on central bank interventions to financial institutions, we examine the impact of capital injection announcements on systemic risk for the banking sector in the U.S. and the euro area between 2008 and 2013. We propose a new measure of options-based systemic risk called...

I use unique supervisory intervention – discretionary installment of de novo Resident Examiners in Russian banks that received government liquidity and capital support funds – to study the causal effect of on-site monitoring on bailed-out banks behavior in crisis. By exploiting detailed...

What are the pros and cons of involving external auditors in banking supervision? This paper investigates the relationship between banking supervision and the involvement of external auditors from a theoretical and empirical perspective. We first provide a simple principal-agent framework that...