at a certain (potentially distorted) price. Regulation is found to induce the risk-neutral bank to behave in a more risk … interaction between capital adequacy regulation and credit risk transfer with credit default swaps (CDS) including its effect on … lending behavior and risk sensitivity of a risk-neutral bank. CDS contracts may be used to hedge a bank's credit risk exposure …

the design of the loss absorption mechanism affects the stability of bank funding and distinguish between Conversion …. As we show, the first two loss absorption mechanisms unambiguously improve a bank's stability of funding position. By … contrast, the latter type of loss absorption mechanism can increase solvency risk and, moreover, is identified as a source of …

The subprime crisis revealed that the adoption of suitable systems for the management of credit risk is of utmost … assessing the capital adequacy. This paper investigates whether decisions on total risk-based capital ratios are channeled … quantitative models in a new perspective. This knowledge may prove valuable for regulators who aim to understand bank behaviour and …

heterogeneity in the balance sheet characteristics that affect banks' responses to liquidity risk. Overall, bank balance sheet … studies conducted in 11 countries to explore liquidity risk transmission. Among the main results is, first, that explanatory … power of the empirical model is higher for domestic lending than for international lending. Second, how liquidity risk …

inclusion (together with some control variables) on some measures of financial stability, including bank non-performing loans … and bank Z-scores. We find some evidence that an increased share of lending to small and medium-sized enterprises (SMEs …

. Asian economies are often characterized as having bank-dominated financial systems and underdeveloped capital markets, in …

case of bank default, and provides it with sufficient funds as precautionary reserves. To identify and classify healthier …