We analyze optimal risk management strategies for a regulatory restricted bank financed with deposits and equity in an infinite horizonmodel. The bank has a positive franchise value from rents coming from deposit related services (liquidity provision, payment services, safety storage), and from...

We analyze optimal risk management strategies for a regulatory restricted bank financed with deposits and equity in an infinite horizon model. The bank has a positive franchise value from rents coming from deposit related services (liquidity provision, payment services, safety storage), and from...