We assess the influence of competition and capital regulation on the stability of the banking system. We particularly … ask two questions: i) how does capital regulation affect (endogenous) entry; and ii) how do (exogenous) changes in the … competitive environment affect bank monitoring choices and the effectiveness of capital regulation? Our approach deviates from the …

system. Whereas the traditional view on regulation focuses on capital as a buffer against exogenous risks, our approach … boundary problem in entity-based financial regulation and provides a motivation for substantially lower levels of leverage …

standard approach subsequent to becoming regulated, i.e., the presence of regulation may induce a bank to decrease the quality …

-term resilience. We investigate the effects of such liquidity regulation on bank liquid assets and liabilities. Results indicate co …-integration of liquid assets and liabilities, to maintain a minimum short-term liquidity buffer. Still, microprudential regulation … microprudential regulation with a macroprudential approach. This involves monitoring of aggregate liquid assets and liabilities and …

The paper studies risk mitigation associated with capital regulation, in a context when banks may choose tail risk … stylized facts about pre-crisis bank behavior, and suggest implications for the optimal design of capital regulation. …

How do near-zero interest rates affect bank competition, risk taking and regulation? I study these questions in a … risk shifting incentives, particularly if rates are expected to remain near-zero for long. At the ZLB, capital regulation …. Complementing existing regulation with policy tools that subsidize the funding cost of banks may improve welfare at the ZLB. …

This paper discusses liquidity regulation when short-term funding enables credit growth but generates negative systemic …