We analyze optimal hedging contracts and show that although hedging aims at sharing risk, it can lead to more risk …-taking. News implying that a hedge is likely to be loss-making undermines the risk-prevention incentives of the protection seller …. This incentive problem limits the capacity to share risks and generates endogenous counterparty risk. Optimal hedging can …

of business lending. We find that ex-ante risk taking by banks (measured by the risk rating of new loans) is negatively …We present evidence of a risk-taking channel of monetary policy for the U.S. banking system. We use confidential data … on banks’ internal ratings on loans to businesses over the period 1997 to 2011 from the Federal Reserve’s survey of terms …

We analyze optimal hedging contracts and show that although hedging aims at sharing risk, it can lead to more risk …-taking. News implying that a hedge is likely to be loss-making undermines the risk-prevention incentives of the protection seller …. This incentive problem limits the capacity to share risks and generates endogenous counterparty risk. Optimal hedging can …

solvency of the main euro area insurance sectors. We model the balance sheet of an insurance company encompassing both life and … non-life business and we calibrate it using country level data to make it representative of the major euro area insurance …

granular data on the bond transactions of U.S. insurance companies. Liquidity inflows from insurance premiums combined with …

solvency of the main euro area insurance sectors. We model the balance sheet of an insurance company encompassing both life and … non-life business and we calibrate it using country level data to make it representative of the major euro area insurance …

increasing risk premia, and countercyclicality in response to rises in the risk-free rate. Using granular data on insurers …

making the assumption that balance-sheet resource allocation is indicative of the strategic focus of banks, we also find … acquisitions (M&As), differences of merging partners in their loan and credit risk strategies are conducive to a higher performance …

), well-functioning institutions are a key driving force for international bank flows. Specifically, foreign banks invest …

deposits and savings deposits. Bank soundness, credit risk and interest rate risk are found to exert a significant influence on … monetary policy was up (down). Overall, we find that competition among banks and competition from financial markets result in a …