This paper studies the optimality of a banking union in a setting with cross-country liquidity spillovers and moral … hazard. Generally, the banking union improves welfare by efficiently providing liquidity to banks, thus limiting spillovers …

default rate and loss given default of bank loans share a cyclical component, related to the business cycle. We infer this … cycle by a new model that distinguishes loans with large and small losses, and links them to the default rate and macro …

-through of monetary policy. However, a 10% tightening in the NSFR improves the pass-through of a 20-bp policy rate reduction by …

asset liquidity risk arises even under minimal fundamental risk. To study the role of illiquidity we introduce realistic … not available in a run, asset liquidity risk has a concave effect on run incentives, quite unlike fundamental risk. Runs … are rare when asset liquidity is abundant, become more frequent as it falls and decrease again under very low asset …

This paper discusses liquidity regulation when short-term funding enables credit growth but generates negative systemic … containing risk and preserving credit quality, while quantity-based fundingratios are distorsionary. Liquidity buffers are either … overconfidence), excess credit and liquidity risk are best controlled with net fundingratios. Taxes on short-term funding emerge …