can fund local loans only to the extent that their capital can absorb potential losses. Loan sales are effectively a means … of employing nonlocal bank capital to support local investments. …

This paper studies how a worsening of the debt overhang distortion on bank lending can explain banking solvency crises … investment restrictions, capital requirements, and stress tests. In the event of a crisis, policy options include reducing the … above sensitivity with commitments and guarantees, stimulating the economy, and restructuring bank capital and ownership. …

quantitatively evaluate several proposals for mandatory bank issue of subordinated debt. The authors find that credit spreads on both …

bank capital may affect the funding of regional investments, concluding that regional banking conditions can affect the …A presentation of a theoretical model of regional banking using plausible information asymmetries to explain how local …

, including a normal return on capital-that is, the same after-tax return on equity that a private firm would require. To date … services. Capital budgeting theory suggests that firms should use a different hurdle rate for each distinct type of activity … factors for paper-based services and for electronic services. Alternatively, a single hurdle rate of capital could be used for …