eighteen subsidiaries of First City Bancorporation in 1992 when lead banks from each of these Texas-based bank holding … companies were declared insolvent. I use this exogenous failure of otherwise healthy subsidiary banks as a natural experiment …

latter, we split the sample of banks by leverage and also use deposit flows at sister banks within a holding company as an … "instrument." The results are consistent with the existence of frictions in capital market facing banks, and that such frictions … small banks, suggesting that the bank lending channel of monetary policy is small. We also find evidence that bank holding …