Today’s regulatory rules, especially the easily-manipulated measures of regulatory capital, have led to costly bank … failures. We design a robust regulatory system such that (i) bank losses are credibly borne by the private sector (ii …) systemically important institutions cannot collapse suddenly; (iii) bank investment is counter-cyclical; and (iv) regulatory …

creating counter-cyclical incentives for banks to raise capital, and so encourage bank lending in bad times. They avoid the …

This paper focuses on bank rescue packages and on the behaviour of troubled banks in light of rescue offers. A puzzling … feature of experience with banking crises is that in many cases policy authorities make offers of bank rescue, and banks are … reluctant to accept these offers. We study situations in which regulators have decided to offer bank rescue plans, and we show …

As the number of bank failures increases, the set of assets available for acquisition by the surviving banks enlarges … for liquidation of banking assets. At a sufficiently large number of bank failures, and in turn, at a sufficiently low … and allowing the regulator to price-discriminate against outsiders in the market for bank sales. …

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 …

) 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 …

short-run; leverage requirements reduce default risk but may significantly reduce bank value; mispriced deposit insurance …

-funded capital injections. However, on closer inspection the composition of bank capital shifted radically from one based on common …

behavior. By paying out dividends, a bank transfers value to its shareholders away from creditors, among whom are other banks …. This way, one bank's dividend payout policy affects the equity value and risk of default of other banks. When such negative … externalities are strong and bank franchise values are not too low, the private equilibrium can feature excess dividends relative to …