: different from local banks, these banks held a geographically diversified portfolio of mortgages which allowed them to tap the …

-over effects. Building on a simple model, this paper introduces a measure of the spill-over effects that a bank generates when it … defaults. The measure is based on an explicit criterion, the aggregate debt repayments, and is bank's specific, affected by the … bank's characteristics and links to other banks. Such measure can be useful to a regulator to determine in which banks cash …

intermediaries' incentives for liquidity transformation are affected by the central bank's reaction to financial crisis. Anticipating … central bank's reaction to liquidity stress gives banks incentives to invest in excessive liquidity transformation, triggering …

This paper models the strategic interaction between a rating agency, a bank and a bank regulator who lacks information … about bank asset risk. The regulator can either (1) make bank capital requirements contingent on credit ratings; or (2) set … constrain high risk bank investment without simultaneously reducing overall investment volume. However, if collusion between the …