We document that natural disasters significantly weaken the stability of banks with business activities in affected regions, as reflected in lower z-scores, higher probabilities of default, higher non-performing assets ratios, higher foreclosure ratios, lower returns on assets and lower bank...

We show that property damages from weather-related natural disasters significantly weaken the stability of banks with business activities in affected regions, as re ected in lower z-scores, higher probabilities of default, higher non-performing assets ratios, higher foreclosure ratios, lower...

The subprime crisis revealed that the adoption of suitable systems for the management of credit risk is of utmost concern. The Basel Committee on Banking Supervision (2009) advises banks to use credit portfolio models with caution when assessing the capital adequacy. This paper investigates...

This paper investigates the factors influencing banks' decision to engage in advanced risk management, from both a theoretical and an empirical perspective. In recent decades, credit risk management in banks has become highly sophisticated and banks have become more active and advanced in the...

The subprime crisis revealed that the adoption of suitable systems for the management of credit risk is of utmost concern. The Basel Committee on Banking Supervision (2009) advises banks to use credit portfolio models with caution when assessing the capital adequacy. This paper investigates...

We study bank default risk in a model with a competitive banking sector where banks lend to risky borrowers and adjust interest rates accordingly. Our main result is the following unconventional equilibrium relationship: a bank can be more likely to default with less risky borrowers than with...