channel, one bank's capital policy affects the equity value and risk of default of other banks. In a model where such … externalities are strong, bank capital takes on the attribute of a public good, where the private equilibrium features excessive … implications of the model with observed bank behavior during the crisis of 2007-09 …

We investigate global factors associated with bank capital flows. We formulate a model of the international banking … system where global banks interact with local banks. The solution highlights the bank leverage cycle as the determinant of …