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 … profitability, reducing bank incentives to accumulate equity buffers and, therefore, increasing the incidence of bank failure …

A bank's decision on loan supply and capital structure determines its immediate bankruptcy risk as well as the future … availability of internal funds. These internal funds in turn determine a bank's future costs of external finance and future …-to-asset ratios, liquidity coverage ratios and regulatory margin calls on the dynamics of loan supply and bank stability. Only …

How do real interest rates affect financial fragility? We study this issue in a model in which bank borrowing is … subject to rollover risk. A bank’s optimal borrowing trades off the benefit from investing additional funds into profitable … assets with the cost of greater risk of a run by bank creditors. Changes in the interest rate affect the price and amount of …

How does bank distress impact their customers' probability of default and trade credit availability? We address this … question by looking at a unique sample of German firms from 2000 to 2011. We follow their firm-bank relationships through times … of distress and crisis, featuring the different transmission of bank distress shocks into already weakened firm balance …

How does bank distress impact their customers' probability of default and trade credit availability? We address this … question by looking at a unique sample of German firms from 2000 to 2011. We follow their firm-bank relationships through times … of distress and crisis, featuring the different transmission of bank distress shocks into already weakened firm balance …

In this paper we relate a bank’s choice between retail and wholesale liabilities to real economic uncertainty and the … resulting volatility of bank loan volumes. We argue that since the volume of retail deposits is slow and costly to adjust to … shocks in the volume of bank assets, banks facing more intense uncertainty and more volatile loan demand tend to employ more …

risk factors, we separate the bank-specific selection and monitoring abilities from the composition of the loan portfolio …, on average, lower loan losses, (b) the loss rate of a given industry in a bank's loan portfolio is lower if the bank has …

We examine the role of bank balance sheet strength in the transmission of financial sector shocks to the real economy … bank credit. We find that banks with strong balance sheets were better able to maintain lending during the crisis. In … that strong bank balance sheets are key for the recovery of credit following crises, and provide support for regulatory …

lending behavior and risk sensitivity of a risk-neutral bank. CDS contracts may be used to hedge a bank’s credit risk exposure … at a certain (potentially distorted) price. Regulation is found to induce the risk-neutral bank to behave in a more risk … credit risk. Under the substitution approach in Basel II (and III) a risk-neutral bank will over-, fully or under-hedge its …

using a new method, the construction of tailored hypothetical bank competitors. …