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 …

conglomerates. We document that bank affiliation provides an informational advantage. We show that (informed) bank …

, and bank mergers. We find that not all companies are equally sensitive to events in the banking sector. The most affected … are the most affected when banks reduce lending. Our results are also in line with theories suggesting that bank debt is …

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