between cash and bank credit lines. Banks create liquidity for firms by pooling their idiosyncratic risks. As a result, firms … shorten. Also consistent with the mechanism in the model, we find that exposure to undrawn credit lines increases bank …

to liquidity assistance as a solution to forbearance. Faced with a bank that chooses capital and liquidity, the … credible, while always bailing out causes moral hazard. In equilibrium, the bank chooses above minimum capital and liquidity … is higher for a regulator more concerned about bank failure, and when the bailout penalty for the bank is higher; this …

less productive self-managed project. Bankers have valuable but costly project management skills and the banking sector … exhibits both adverse selection and moral hazard. Depositors do not fully account for the social benefits accruing from bank …

We investigate the optimal regulation of financial conglomerates that combine a bank and a non-bank financial … not only of the present debate on the regulation of financial conglomerates but also in the light of existing US bank …

efficient’. While Central Bank policy may have shifted radically now that stability is an explicit objective of policy, the same …

regulatory standards that reflect differences in the social cost of instability in the banking and insurance sector; and …