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. …

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 …

. In this paper we raise the question whether credit asset securitization affects the cyclicality (or commonality) of bank … equity values. The commonality of bank equity values reflects a major component of systemic risks in the banking market … systematic risk of all tranches, and derive its effect on the issuing bank's equity beta. The simulation results show that under …

This Paper shows that bank closure policies suffer from a ‘too-many-to-fail’ problem: when the number of bank failures … is large, the regulator finds it ex-post optimal to bail out some or all failed banks, whereas when the number of bank …-ante standpoint. We formalize this time-inconsistency of bank regulation. We also argue that by allowing banks to purchase failed …

ex-post aspect, in which the failure of a bank brings down a surviving bank as well, and second, the ex-ante aspect, in … which banks endogenously hold correlated portfolios increasing the likelihood of joint failure. When bank loan returns have … a systematic factor, the failure of one bank conveys adverse information about this systematic factor and increases the …

This paper constructs a new measure of currency mismatch in the banking sector that controls for bank lending to …