investigate two increasingly significant margins of adjustment in credit markets: banks' ability to sell loans and shadow bank … following bank capital shock. Recovery is also faster, because profitable loan sales (e.g., securitization) allow banks to build …Existing macroeconomic models focused on bank balance sheet lending are deficient because they do not account for the …

Banks are optimally opaque institutions. They produce debt for use as a transaction medium (bank money), which requires … that information about the backing assets - loans - not be revealed, so that bank money does not fluctuate in value …, needed for allocative efficiency. Intermediaries exist to hide such information, so banks select portfolios of information …

The traditional model of bank-led financial intermediation, where banks issue demandable deposits to savers and make … size. Implicit banks' costs and subsidies explain shifting bank balance sheet composition. Together, these forces explain …% to 13%. Additionally, the share of loans as a percentage of bank assets has fallen from 70% to 55%. We develop a …

creditors. The consequence of this agency problem is that leverage restrictions on banks generate a very substantial welfare …

. Empirically, we find that intermediary leverage is negatively aligned with the banks' Value-at-Risk (VaR). Motivated by the …

Traditionally, banks and financial intermediaries borrow short and lend long. This causes a risk of negative net worth … of deposit insurance as a function of capital-asset ratio for a bank with demand liabilities and longer term, default …

We study asset and debt characteristics of US bank holding companies. We show that financial institutions, especially …