innovation was to make capital charges more sensitive to risk. Using data from the German credit register, and employing a … quantity and the composition of bank lending. We find that credit supplied by banks that introduced the model-based approach … exhibits a higher sensitivity to model-based PDs as compared with credit supplied by banks that remained under the traditional …

between credit risk and liquidity risk of banks. This interaction is found to make a risk neutral bank behave as if it were … money market destroys endogenous risk aversion and allows banks to manage credit risk and liquidity risk independently. The …

, and regulators around bank insolvency may corrupt banks' credit allocation and monitoring decisions, leading to suboptimal … provide for economically superior credit allocation and monitoring. We test this hypothesis of a 'catharsis effect' of … essentially works through benefiting better quality firms and reallocating credit towards firms that need it most. Additional …

cycle. With forward-looking banks, lending cycles, credit booms and busts, or suppressed and highly fragile bank systems can …-taking without fully hampering credit intermediation. …