Structural changes in retail banking markets and development of remote access technologies have reduced the number of bank branches in many developed countries. That makes close-downs of bank branches and service accessibility in rural/peripheral regions interesting topics of public discussion....

The paper investigates the optimal design of bank bailouts. Under three types of ex post moral hazard that tempt banks to hide loan losses, the paper analyzes banking regulation via three Prompt Corrective Action instruments: prohibition of dividends, limits on compensation to managers and early...

The early warning system literature on banking crises has often relied on linear classifiers such as the logit model, which are usually estimated with large datasets of multiple regions of countries. We construct an EWS based on an artificial neural network model with monthly data from the...

CDS spreads are often used as market's view of credit risk. There is no popular alternative to it; perhaps only the distance-to-default measure based on Merton (1974) comes close to it. In this paper we investigate the relationship between these two measures for large European banks in post...

This paper reports a study on decision-making by borrowers regarding take-up of different loan types in a laboratory microfinance experiment setting. I hypothesize that when borrowers are offered a flexible choice of different loan types (here, individual liability (IL) and joint liability...

This paper uses mortgage data to construct a measure of terms on which households access to external finance, and relates it to consumption at both the aggregate and cohort levels. The Household External Finance (HEF) index is based on the spread paid by risky borrowers in the mortgage market....

This paper uses a unique data set on more than 600,000 mortgage contracts to estimate a credit supply function which allows for risk-heterogeneity. Non-linearity is modelled using quantile regressions. We propose an instrumental variable approach in which changes in the tax treatment of housing...

This paper explores the extent to which interest risk exposure is priced in bank margins. Our contribution to the literature is twofold: First, we present an extended model of Ho and Saunders (1981) that explicitly captures interest rate risk and returns from maturity transformation. Banks price...

This paper introduces a stress test of the corporate credit portfolios of 24 large German banks by a two-stage approach: First, a macro-econometric model is used to forecast the impact of a substantial increase of the user cost of business capital for firms worldwide on three particularly...

Little is known about how socioeconomic characteristics of executive teams affect corporate governance in banking. Exploiting a unique dataset, we show how age, gender, and education composition of executive teams affect risk taking of financial institutions. First, we establish that age,...