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 …

is removed. Contingent capital is useful for macroprudential regulation and we show that the countercyclical feature is …

subject to a liquidity regulation that is very similar to Basel III’s Liquidity Coverage Ratio (LCR). We find that most banks … the regulation. More solvent banks hold fewer liquid assets against their stock of liquid liabilities, suggesting an …We investigate the liquidity management of 62 Dutch banks between January 2004 and March 2010, when these banks were …

remaining challenges are addressed, capital regulation can be a powerful tool for enhancing the role of banks in the economy … risk premium that must go down if banks have more equity. It is thus incorrect to assume that the required return on equity … remains fixed as capital requirements increase. It is also incorrect to translate higher taxes paid by banks to a social cost …

-owned banks. The levels of non-performing loans and capital adequacy ratios compare poorly in international perspective and may … for the two main stateowned banks in mid-2012. To foster the credibility of the new tests, the main results and underlying … by ring-fencing impaired assets, which would create conditions for an orderly resolution of non-viable banks and a rapid …

bank’s financial condition decreases welfare if the government is strongly pro-continuation. …