investors to be less prone to run individual banks, but runs will be systemic. In addition, we show that bank runs are …

pre-crisis bank behavior, and suggest implications for the optimal design of capital regulation. …

between cash and bank credit lines. Banks create liquidity for firms by pooling their idiosyncratic risks. As a result, firms … shorten. Also consistent with the mechanism in the model, we find that exposure to undrawn credit lines increases bank …

We address the following questions concerning bank capital: why are banks so highly levered, what are the consequences … of this leverage for the economy as a whole, and how can robust capital regulation be designed to restrict bank leverage … to levels that do not generate excessive systemic risk? Bank leverage choices are a delicate balancing act: credit …

banks to park liquidity at the central bank rather than lend in the market. We show that following this structural break …, settlement bank liquidity had a precautionary nature in that it rose on calendar days with a large amount of payment activity and … for banks with greater credit risk. We establish that the liquidity demand by settlement banks caused overnight inter-bank …

paper introduces a measure of the threat that a bank poses to the system. Such a measure, called threat index, may be … individual institutions to the risk in the system. Although the threat index and the default level of a bank both reflect some …