and examine the implications for bank risk. We find that banks use LLPs to manage the level and volatility of earnings … expected and unexpected losses that affects bank risk and profitability. … to avoid fluctuations in their risk-weighted assets. Our findings highlight an important tradeoff in the provisioning for …

We conduct a laboratory experiment to examine under which circumstances a depositor-run at one bank may lead to a … depositor-run at another bank. We implement two-person coordination games which capture the essence of the Diamond-Dybvig (1983 …) bank-run model. Subjects in the roles of followers observe the deposit withdrawal decisions of leaders before they make …

The paper studies risk mitigation associated with capital regulation, in a context where banks may choose tail risk … pre-crisis bank behavior, and suggest implications for the optimal design of capital regulation. … assets. We show that this undermines the traditional result that higher capital reduces excess risk-taking driven by limited …

This paper discusses liquidity regulation when short-term funding enables credit growth but generates negative systemic … risk externalities. It focuses on the relative merit of price versus quantity rules, showing how they target different … incentives for risk creation. When banks differ in credit opportunities, a Pigovian tax on short-term funding is efficient in …

spreads declined in response to the disclosure of stress test results. We also find that bank systematic risk, as measured by … the US banking stress tests on banks' equity prices, credit risk, systematic risk, and systemic risk during the 2009 … systemic risk. …

interaction between politicy makers and pressure groups. The second half of the report is devoted to bank regulation. It is argued …This report presents an overview of the theory of regulation in general, with special attention for the regulation of … banks. Two theories of government regulation are described. The first, normative, theory uses market failures as the …

banks. However if in extreme scenarios the LCR becomes a binding constraint, the interaction of bank behaviour with the …-testing model, which takes into account the impact of bank reactions on second round feedback effects. We show that a flexible …

banks' liquidity risk management. Our main question is whether the presence of liquidity regulation substitutes or … substituted by liquidity regulation, a bank's disclosure requirement and size remain significant. A key takeaway from our analysis … countries over a ten-year period. We highlight the role of several bank-specific, institutional and policy variables in shaping …

to a liquidity regulation that is very similar to Basel III's Liquidity Coverage Ratio (LCR). We find that most banks … the regulation. More solvent banks hold fewer liquid assets against their stock of liquid liabilities, suggesting an …

requirements. It extends the Stiglitz-Weiss model of credit rationing to allow for bank default. Bank capital structure then …. Introducing bank financiers, the paper also shows that uninsured funding raises the sensitivity of rationing to capital …