incentives for risk creation.When banks differ in credit opportunities, a Pigovian tax on short-term funding is efficient in … credit incentives are strongest.When banks differ instead mostly in gambling incentives (due to low charter valueor …

Under Basel III rules, banks become subject to a liquidity coverage ratio (LCR) from 2015 onwards, to promote short …

The paper studies risk mitigation associated with capital regulation, in a context when banks may choose tail risk … liability. When capital raising is costly, poorly capitalized banks may limit risk to avoid breaching the minimal capital ratio …. A bank with higher capital has lesschance of breaching the ratio, so may actually take more risk. As a result, banks …

tractable dynamic general equilibrium model, in which forward-looking banks compete imperfectly for deposit funding, and deposit … becomes a less effective tool to curb risk shifting incentives. When banks cannot pass on the cost of capital to depositors …. Complementing existing regulation with policy tools that subsidize the funding cost of banks may improve welfare at the ZLB. …

Under the new Capital Accord, banks choose between two different types of risk management systems, the standard or the …

extant literature in that it recognizes the fixed costs associated with banks' monitoring technologies. These costs make … market share and scale important for the banks' cost structures. Our most striking result is that increasing (costly) capital … requirements can lead to more entry into banking, essentially by reducing the competitive strength of lower quality banks. We also …