Traditional theory suggests that higher bank profitability (or franchise value) dissuades bank risk-taking. We … highlight an opposite effect: higher profitability loosens bank borrowing constraints. This enables profitable banks to take … risk on a larger scale, inducing risk-taking. This effect is more pronounced when bank leverage constraints are looser, or …

The inability of most bank merger studies to control for hidden bailouts may lead to biased results. In this study, we … employ a unique data set of approximately 1,000 mergers to analyze the determinants of bank mergers. We use data on the …

some extent by retail mortgage loans. While results suggest that the profitability of banks is impacted by additional …

governmen-owned bank mergers. We compare forced to voluntary bank exits and show that the former cause better bank profitability … and efficiency at the expense of riskier financial profiles. Regarding real effects, firms exposed to forced bank mergers …We test whether limited market discipline imposes exit barriers and poor profitability in banking. We exploit an …

interest margin (NIM) and its components, retail lending and retail deposit rates. Using two proprietary bank-level data sets … market rates. As low profitability could hamper the ability of banks to expand lending, I also investigate the impact of the …

profitability, reducing bank incentives to accumulate equity buffers and, therefore, increasing the incidence of bank failure … unweighted leverage requirements, their differential impact on bank lending, and equity buffer accumulation in excess of … regulatory minima. Tighter risk-weighted capital requirements reduce loan supply and lead to an endogenous fall in bank …