results show that zombie firms are more likely to be connected to weak banks, suggesting that the zombie firm problem in … Europe may at least partly stem from bank forbearance. The increasing survival of zombie firms congests markets and … strengthening efforts and insolvency regime reform would contribute to breaking the shackles on potential growth in Europe …

results show that zombie firms are more likely to be connected to weak banks, suggesting that the zombie firm problem in … Europe may at least partly stem from bank forbearance. The increasing survival of zombie firms congests markets and … strengthening efforts and insolvency regime reform would contribute to breaking the shackles on potential growth in Europe …

Europe’s financial structure has become strongly bank-based – far more so than in other economies. We document that an … amplification mechanism, by which banks overextend and misallocate credit when asset prices rise, and ration it when they drop. The … paper concludes by discussing policy solutions to Europe’s “bank bias”, which include reducing regulatory favouritism …

and become toxic. We study the effects of the LRR on lending strategies and its implications for banks’ stability. We show … that the LRR might induce banks with low-risk lending strategies to diversify their portfolios into high-risk loans until … the LRR is no longer the binding capital constraint on them. If the LRR is lower than the average bank’s IRB requirement …

procyclicality of banks' loan loss provisioning. We use granular loan-level data from the euro area's credit register and investigate …. Additionally, banks with a larger capital headroom provision significantly more, particularly for loans using IFRS 9. This suggests … a higher risk of underprovisioning for less capitalized banks. …

In 2001, government guarantees for savings banks in Germany were removed following a law suit. We use this natural …/borrower information. The results suggest that banks whose government guarantee was removed reduced credit risk by cutting off the riskiest … borrowers from credit. At the same time, the banks also increased interest rates on their remaining borrowers. The effects are …

economy crucially depends on who holds the bubble. When banks are the bubble-holders, this amplifies the output boom while the …

This paper investigates whether European banks have capital targets and how deviations from the target impact their … equity composition and activity mix. Using quarterly data for a sample of large European banks between 2004 and 2011, we show … that there are notable asymmetries in banks' reactions to deviations from optimal capital levels. Banks prefer to reshuffle …

the capital structure of large U.S. and European banks during 1991 to 2004. Instead, standard cross-sectional determinants … of non-financial firms' leverage carry over to banks, except for banks whose capital ratio is close to the regulatory … minimum. Consistent with a reduced role of deposit insurance, we document a shift in banks' liability structure away from …