We study the efficiency of banking regulation under financial integration. Banks freely choose the jurisdiction where …

imply that an individual bank failure in one country could trigger negative spillover effects in another country. Such cross … from a supranational perspective. In consequence, the probability of a bank failure will be inefficiently high. Against the …

ratio) and size (TBA) of the industry are linked to lower sovereign risk in general. Foreign bank penetration and …We analyze the link between banking sector quality and sovereign risk in the whole European Union over 1999–2014. We … employ four different indicators of sovereign risk (including market- and opinion-based assessments), a rich set of …

We explore how changes in capital-based macroprudential regulation in the euro area affect the exposure of national … banking sectors to domestic government debt, thus strengthening or weakening the sovereign-bank nexus. To do so, we construct … banks' exposure to domestic sovereign bonds in the periphery countries and thus deepens the sovereign-bank nexus. By …

Banking regulation invites banks to gamble when buying government bonds that regulators consider to be risk-free. The … regulation in order to enhance their fiscal leeway. We examine an unintended side-effect of banking regulation, namely the zero-risk …. By contrast, the EU would benefit from more risk-based macroprudential regulation and a more credible constitutional no …

We model EU countries' bank ratings using financial variables and allowing for intercept and slope heterogeneity. Our … differences in financial factors, which may reflect differences in country risk and the legal and regulatory framework that banks … face (such as foreclosure laws). In addition, we find that ratings may respond differently to the liquidity and operating …

We develop a stylized DSGE model in which banks face capital regulation and their loan portfolios are subject to non … 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 …

This paper analyzes the implications of the gradual rise in bank concentration since the 1990s for the transmission of … the level of local bank concentration and bank capitalization. I find that banks operating in high-concentration markets … in local deposit and loan markets, along with bank capital requirements, lead to frictions on the pass-through to the …

-financials is essential to evaluate the risk emanating from an unhealthy banking sector and should be considered in new regulatory …, from an unimportant liquidity provisioning channel over reduced room for actions due to regulatory requirements up to a …