We provide a theoretical foundation for the claim that prolonged periods of easy monetary conditions increase bank risk … taking. The net effect of a monetary policy change on bank monitoring (an inverse measure of risk taking) depends on the … structures, a monetary easing leads to greater leverage and lower monitoring. However, if a bank's capital structure is fixed …

growth, suggesting that Asian banks are also subject to indirect market discipline mechanisms through bank market structure …. This study therefore sheds light on the importance of enhancing bank competition to overcome bank risk and strengthen … financial intermediation. This study also advocates greater reliance on market discipline to promote bank stability …

insurance coverage in 2013 and the role of financial intermediaries in the funding market changed this discipline. The database … size of banks and their capitalization being the main disciplining factors. Deposit insurance has reduced market discipline …. The results did not indicate the existence of market discipline through the quantity mechanism and deposit insurance did …

We analyse the poisonous interaction between bank rescues, financial fragility and sovereign debt discounts. In our … sovereign debt discount. We introduce long term government debt, which gives rise to the possibility of capital losses on bank … intermediaries causes bond prices to drop triggering capital losses at the bank under intervention. This mechanism shows the limits …

We study whether government subsidies can stimulate bank funding of marginal investment projects and the associated … can use it as an exogenous shock to identify bank responses. On average, firm subsidies do not affect bank lending, but … reduce banks’ distance to default. Average effects conflate important bank-level heterogeneity though. Conditional on various …