system. In contrast, the SLS focusses on the problematic banks which suffer a liquidity shortfall. These measures provide an … banks' strategic responses to a market undergoing sharp price declines. We test our approach using several applications … banks' US dollar business and the recent COVID-19 crisis …

We develop a model of bank risk-taking with strategic sovereign default risk. Domestic banks invest in real projects … government's incentives to repay and therefore lowers its borrowing costs. For low levels of government debt, banks influence … default are perfectly correlated. Banks fail to account for how their bond purchases influence the government's default …

hoarding reaction by their regional branches. Shock-affected branches of Brazilian banks increase liquid assets and cut lending …-wide freeze. These effects increase in branches' reliance on internal funding and vary depending on banks' access to central bank …

hoarding reaction by their regional branches. Shock-affected branches of Brazilian banks increase liquid assets and cut lending …-wide freeze. These effects increase in branches' reliance on internal funding and vary depending on banks' access to central bank …