This paper compares alternative procedures to mitigate the procyclicality of the new risk-sensitive bank capital … growth. Our discussion concludes that the latter is better in terms of simplicity, transparency, and consistency with banks …

This paper finds that lending by state banks is less procyclical than lending by private banks, especially in countries … with good governance. Lending by state banks in high income countries is even countercyclical. On the liability side, state … banks expand potentially unstable non-deposit liabilities relatively little during booms, especially in countries with good …

Two aspects of systemic risk, the risk that banks fail together, are modeled and their interaction examined. First, the … which banks endogenously hold correlated portfolios increasing the likelihood of joint failure. When bank loan returns have … cost of borrowing for the surviving banks. Such information contagion is thus costly to bank owners. Given their limited …

We present a simple model of an economy with heterogeneous banks that may be funded with uninsured deposits and equity … supply of bank capital and show that optimal capital requirements should be lowered. Failure to do so would keep banks safer …

This paper seeks to understand the interplay between banks, bank regulation, sovereign default risk and central bank … guarantees in a monetary union. I assume that banks can use sovereign bonds for repurchase agreements with a common central bank …, and that their sovereign partially backs up any losses, should the banks not be able to repurchase the bonds. I argue that …

demonstrate that loose monetary conditions lead to booms in real estate lending and house prices bubbles; these, in turn …

17 advanced economies since 1870. The new data show that the share of mortgages on banks’ balance sheets doubled in the … course of the 20th century, driven by a sharp rise of mortgage lending to households. Household debt to asset ratios have … risen substantially in many countries. Financial stability risks have been increasingly linked to real estate lending booms …

low, so it may end up exacerbating the inherent pro-cyclicality of risk-sensitive bank capital regulation. We also note … that Basel III does not address pro-cyclicality in any other way. We propose a fully rule-based smoothing of minimum …