This paper assesses the merits of countercyclical bank balance sheet regulation for the stabilization of financial and … equilibrium model with banks and bank capital, in which bank capital solves an asymmetric information problem between banks and …, though banks do not internalize this impact. Regulation, in the form of a constraint on bank leverage, can mitigate the …

One way of internalizing the externalities that each individual bank imposes on the rest of the financial system is to … information on interbank exposures. A relatively small bank playing an outsized role in the interbank market might be more … systemic, and thus garner a higher capital surcharge, than a less-connected bank of somewhat larger size. Alternatively, if the …

liquidity mismatch in banks' balance sheets leads to endogenous bank capital (outside equity) requirements for preventing bank …-cycle dynamics of asset prices, asset illiquidity and bank capital requirements are interconnected. …

Recent work at the Bank of Canada studied the impact of default in Canada's large-value payments system, and concluded … private sector participants and the Bank from defaults in the payments system. They also gauge the upper bound of possible …

The paper employs a unique identification strategy that links survey data on household consumption expenditure to bank …-level data in order to estimate the effects of bank financial distress on consumer credit and consumption expenditures …

, economies whose banking sectors remain well-capitalized experience smaller reductions in bank lending and less pronounced … downturns. Bank capital thus increases an economy's ability to absorb shocks and, in doing so, affects the conduct of monetary … policy. The model is also used to shed light on the ongoing debate over bank capital regulation. …

relationship between banks and their depositors. As a result, bank capital and entrepreneurial net worth jointly determine … friction that banks face is reduced or eliminated. After documenting that the bank capital-asset ratio is countercyclical in …