-to-assets ratio is ambiguous. Similarly, as competition increases, the probability of bank failure can either increase or decrease. We … literature are negatively and significantly related to measures of bank competition. Thus, there is no evidence of a trade …-off between bank competition and stability, and bank competition seems to foster banks'' willingness to lend …

market mobility, bonus caps simultaneously reduce risk shifting by bank executives (too much risk taking because of limited …This paper develops a theoretical framework to study the impact of bonus caps on banks' risk taking. In the model … are only effective when bank executives' mobility is restricted. It also suggests, irrespective of the degree of labor …

negatively associated with both a bank's contribution to systemic risk and its idiosyncratic risk, and an over-reliance on non …We analyze how bank profitability impacts financial stability from both theoretical and empirical perspectives. We … first develop a theoretical model of the relationship between bank profitability and financial stability by exploring the …

We study how low interest rates in the United States affect risk taking in the market of crossborder leveraged … decline in longer-term U.S. interest rates. Economic uncertainty and risk appetite appear to play a limited role in explaining … ex-ante credit risk. Our results highlight the potential policy challenges faced by central banks in affecting credit …

We consider a moral hazard economy in banks and production to study how incentives for risk taking are affected by the … quality of supervision. We show that low interest rates may generate excessive risk taking. Because of a pecuniary externality … a constraint on asset allocation. We show that the political process tends to exacerbate excessive risk taking and …

orientation, pressures on funding models and entity structures could affect the efficiency of capital flows through the bank …

We examine how bank competition in the run-up to the 2007-2009 crisis affects banks' systemic risk during the crisis … competition at the industry level lead to higher realized systemic risk. The results suggest that the use of securitization … exacerbates the effects of market power on the systemic dimension of bank risk, while capitalization partially mitigates its …