Financial crises are associated with reduced volumes and extreme levels of rates for term inter-bank transactions, such … leveraged banks’ precautionary demand for liquidity. When adverse asset shocks materialize, a bank’s ability to roll over debt … is impaired because of agency problems associated with high leverage. In turn, a bank’s propensity to hoard liquidity is …

hedge to fund drawn credit lines and other commitments. We shed new light on this issue by studying the behavior of bank …

immediate, unprecedented widening of sovereign CDS spreads and narrowing of bank CDS spreads; however, post-bailouts there … emerged a significant co-movement between bank CDS and sovereign CDS, even after controlling for banks' equity performance …, the latter being consistent with an effect of the quality of sovereign guarantees on bank credit risk. …

liability of banks and the presence of a negative externality of one bank’s failure on the health of other banks give rise to a … risk. Regulatory mechanisms such as bank closure policy and capital adequacy requirements that are commonly based only on a … bank’s own risk fail to mitigate aggregate risk-shifting incentives, and can, in fact, accentuate systemic risk. Prudential …

Bank liquidity is a crucial determinant of the severity of banking crises. In this paper, we consider the effect of … welfare question as to when there is too much or too little liquidity on bank balance sheets relative to the socially optimal …

The merit of having international convergence of bank capital requirements in the presence of divergent closure … policies of different central banks is examined. While the privately optimal level of bank capital decreases with regulatory … forbearance (they are strategic substitutes), the socially optimal level of bank capital increases with regulatory forbearance …

) focus and diversification using a unique data set that is able to identify individual bank loan exposures to different … deterioration in bank monitoring quality at high levels of risk and a deterioration in bank monitoring quality upon lending … expansion into newer or competitive industries. We find that industrial loan diversification reduces bank return while …