such dimensions are compressed or ignored, capital arbitrage activities by banks are likely to continue, leading to an …

Bank risk-based capital (RBC) standards require banks to hold differing amounts of capital for different classes of … decomposes loan risk into term structure, default, and market risk. One implication of our findings is that although banks have …

system. We substantiate this argument with three didactic findings: (1) commercial banks in general were prone to engage in … channeling risky entrusted loans; (2) shadow banking through entrusted lending masked small banks' exposure to balance …-sheet risks; and (3) two well-intended regulations and institutional asymmetry between large and small banks combined to give …

its response to that crisis (allowing weak banks to close) and the redoubling of regulatory efforts to promote market … discipline has played an important role in prudential regulation by encouraging proper risk management by banks. There is … substantial heterogeneity among banks in the interest rates they pay for debt and the rate of growth of their deposits, and that …

compensation for the illiquidity investors will be subject to. We argue that banks can resolve these liquidity problems that arise … in direct lending. Banks enable depositors to withdraw at low cost, as well as buffer firms from the liquidity needs of …

Banks' reluctance to repair their balance sheets, combined with deposit insurance and regulatory forbearance in … forbearance incentivizes banks to both retain risky loans and reject new good opportunities. With sufficient regulatory … forbearance, partially-insured banks act exactly as if they are fully insured. Stress tests certify that uninsured creditors will …

) many large and complex banks voluntarily chose to have a risk committee before the Dodd-Frank Act forced bank holding …