We develop a model of the joint capital structure decisions of banks and their borrowers. Strikingly high bank leverage … that highly levered financial intermediaries can offer the lowest interest rates. Low asset volatility enables banks to … borrowers, which can paradoxically lead to riskier banks. Doubling current capital requirements would reduce the default risk of …

the experience of 34 OECD countries over 1980-2014 to assess the effects of changes in the tax structure on the long … while keeping government size constant typically lift long-term output per capita when they involve cuts in the labour tax …-income effects of revenue-neutral reductions in labour tax wedges are broadly in line with intuition: the relative position of those …

be avoided by restricting banks' domestic sovereign exposures relative to their equity. Second, equity requirements can … be lowered if banks only hold senior domestic sovereign debt. Third, such requirements shrink even further if banks only … hold the senior tranche of an internationally diversified sovereign portfolio – known as ESBies in the euro-area context …

We develop a dynamic model of banking to assess the effects of liquidity and leverage requirements on banks' insolvency … risk. In this model, banks face taxation, flotation costs of securities, and default costs and maximize shareholder value …