We develop a model of bank risk-taking with strategic sovereign default risk. Domestic banks invest in real projects … their default risks through purchases of bonds. But, for high debt levels, this influence is lost since bank and government …

One of the main concerns associated with central bank digital currencies (CBDC) is the disintermediating effect on the … banking sector in general, and the risk of bank runs in times of crisis in particular. This paper examines the implications of … an interest-bearing CBDC on banking crises in a dynamic bank run model with a financial accelerator. The analysis …

financially dependent industries. Finally, we show that integration increases the similarity of bank lending fluctuations between …

What is the impact of a sudden and sizeable increase in bank capital requirements on the lending activity by directly … affected banks and by non-affected non-bank financial institutions (NBFIs)? To answer this question, we apply a difference … activities, in riskier and more competitive borrower segments, but NBFIs do not seem to rely on increased bank funding to finance …