bank failure during the 2007-10 crisis, and to search for evidence of manipulated Basel risk-weights.  Compared with the … unweighted leverage ratio, we find the risk-weighted asset ratio to be a superior predictor of bank failure when banks operate … under the Basel II regime, provided that the risk of a crisis is low.  When the risk of a crisis is high, the unweighted …

Stable Funding ratios of Basel III.  When bank failures are socially costly, microprudential regulation of leverage is also …Banks create excessive systemic risk through leverage and maturity mismatch, as financial constraints introduce welfare … sheets, which require less information than Pigouvian taxes.  These can be implemented using the Liquidity Coverage and Net …

This paper studies the consequences of a regulatory pay cap in proportion to assets onbank risk, bank value, and bank … in the labour market.The risk reduction is achieved without the possibility of reduced lending from a Tier 1increase. The … cap encourages diversi cation and reduces the need a bank has to focus ona limited number of asset classes. The cap can be …

We analyse a model in which bank deposits are insured and there is an exogenous cost of bank capital. The former effect … results in bank overinvestment and the latter in underinvestment. Regulatory capital requirements introduce investment … upon the home bank`s riskiness, the extent of international diversification, and the liability structure (branch or …

We investigate the optimal regulation of financial conglomerates which combine a bank and a non-bank financial … not only of the present debate on the regulation of financial conglomerates but also in the light of existing US bank … institution. The conglomerate`s risk-taking incentives depend upon the level of market discipline it faces, which in turn is …

We present a model for Financial fragility in which banks are risk-averse portfolio managers and there is uncertainty … over risk management parameters. There is a danger of heightened risk aversion and projects in small economies are assumed …

We model the interaction between two economies where banks exhibit both adverse selection and moral hazard and bank … regulators try to resolve these problems. We find that liberalising bank capital flows between economies reduces total welfare by …

examines why such regulation is a better approach than taxation to address systemic risk externalities, and why the public … interest requires much more capital than banks would choose. The role of structural regulation in making banking systems safer …