A fixed-rate deposit insurance system provides a moral hazard for excessive risk taking and is not viable absent … turn, caused banks to- increase default risk through increases. in asset risk and reductions in capital. This hypothesis is …

probability of bank failure and the risk exposure of the deposit insurance fund. On the other hand, the utility … asset risk and can increase the probability of bank failure. ; In this paper, we show that this seeming inconsistency stems …

This paper uses household consumption data to investigate whether uninsurable idiosyncratic risk accounts for the … idiosyncratic income shocks. Following Mankiw (1986), the paper develops an equilibrium factor model in which risk premia depend on …

past gains and losses on investors’ risk aversion. The paper first presents a simple model examining how heterogeneous … changes in investors’ risk aversion affects portfolio decisions and stock prices. Second, the paper shows empirically that …

from their stock (and bond) prices would take less risk than non-publicly traded banks because counterparties, borrowers …, and regulators could react to adverse public market signals against publicly traded banks. In comparing the credit risk …, earnings risk, capitalization, and failure risk between publicly traded and non-publicly traded banks, the evidence in this …