We show that borrowing firms benefit substantially from important enforcement actions issued on U.S. banks for safety … that forces banks to lower their cost of credit, irrespective of other changes in their business models after the …

for the remaining three quintiles of listed European banks. This observation suggests that the Basel process has succeeded … in containing systemic risk for the majority of European banks but not for the largest and most risky institutions. In … risk. Based on this evidence, the sub-prime crisis found especially the largest and more systemic banks ill-prepared and …

Formal enforcement actions issued against banks for violations of laws and regulations related to safety and soundness … enforcement actions issued against U.S. banks, we show that they have a strong negative effect on price terms (loan spreads and … been much higher, while punished banks intensify use of collateral …