conditions, credit default and bank capitalization for the transmission of macroeconomic shocks. We fit the model to euro area … empirical literature, i.e. the pro-cyclicality of bank profitability and the counter-cyclical response of firm default rates and …

systemically important financial institutions. We propose a bank default risk model, in the vein of the classic Merton-type, which …

Why do banks remain passive? In a model of bank-firm relationship we study the trade-off a bank faces when having … defaulting firms declared bankrupt. First, the bank receives a payoff if a firm is liquidated. Second, it provides information … about a firm's type to its competitors. Thereby, asymmetric information between banks is reduced and bank competition …

theoretically and empirically motivated banking sector characteristics, and a Bayesian inference in panel estimation as a … ratio) and size (TBA) of the industry are linked to lower sovereign risk in general. Foreign bank penetration and …

This paper analyzes the effect of the removal of government guarantees on bank risk taking. We exploit the removal of …