The capital structure and regulation of financial intermediaries is an important topic for practitioners, regulators and academic researchers. In general, theory predicts that firms choose their capital structures by balancing the benefits of debt (e.g., tax and agency benefits) against its...

Capital structure is an important topic in corporate finance, both for practitioners and academic researchers. This paper examines the impact of deposit insurance and capital requirements on the optimal capital structure of banks. The contingent claims model of capital structure is extended to...