We investigate how the better integration of U.S. banks across states has affected economic volatility within states. In theory, the link between bank integration and volatility is ambiguous; integration tends to dampen the impact of bank capital shocks on state activity, but it amplifies the...

This paper evaluates the reduction of credit risk that can be achieved in Switzerland by a national diversification of bank lending. Using a credit risk model based on corporate default rates, I find that the risk of a nationally diversified loan portfolio is up to 20% smaller than the sum of...

This paper evaluates the reduction of credit risk that can be achieved in Switzerland by a national diversification of bank lending. Using a credit risk model based on corporate default rates, I find that the risk of a nationally diversified loan portfolio is up to 20% smaller than the sum of...

We investigate how bank migration across state lines over the last quarter century has affected the size and covariance of business fluctuations within states. Starting with a two-state version of the unit banking model in Holmstrom and Tirole(1997), we conclude that the theoretical affect of...

We examine the prudential implications of the co-existence between the standardized approach and the internal ratings-based (IRB) approach, as defined in the new Basle Accord. We consider a model in which sophisticated banks, eligible for the IRB approach, and unsophisticated banks, eligible for...

We examine the prudential implications of the co-existence between the standardized approach and the internal ratings-based (IRB) approach, as defined in the new Basle Accord. We consider a model in which sophisticated banks, eligible for the IRB approach, and unsophisticated banks, eligible for...

We investigate how the better integration of U.S. banks across states has affected economic volatility within states. In theory, the link between bank integration and volatility is ambiguous; integration tends to dampen the impact of bank capital shocks on state activity, but it amplifies the...

We try to detect contagion effects within the Swiss banking sector by examining the impact of the Russian debt moratorium on Swiss banks' stock prices. In a first step, using event study methodology, we compute Swiss banks' stock returns for a number of events related to the Russian moratorium....

Interstate banking has ambiguous theoretical effects on state business volatility, but the (net) empirical effect has been stabilizing. In theory, bank diversification across states diminishes the impact of bank capital shocks on state activity, but amplifies the impact of firm collateral...