targeting bank management and, to a lesser extent, penalties mitigate moral hazard. Weak interventions, such as warnings, do not …

that due to its size, a large bank receives a more precise signal about the overall liquidity development in the banking … sector. In an upcoming liquidity shortage this large bank can exploit its informational advantage in the spot money market by … rationing liquidity. Using forward contracts, the large bank can credibly commit not to squeeze small banks in the event of a …

of firm's publicly observable credit quality. Under plausible assumptions about the cost of bank borrowing the model … times and bank debt in adverse times. The paper suggests that better publicly available information about firm quality and …

Outright bank failures without prior indication of financial instability are very rare. Supervisory authorities monitor … regarded as troubled to varying degrees before outright closure. But to our knowledge virtually all studies that predict bank … failures neglect the ordinal nature of bank distress. Exploiting the distress database of the Deutsche Bundesbank we …