We develop a structural model for valuing bank balance sheet components such as the equity and debt value, the value … for the government when the bank is operated by private shareholders including the present value of a possible future … bailout, the bailout value incurred by the government following the abandonment of the private shareholders, and, moreover …

The investment fund sector, the largest component of the non-bank financial system, is growing rapidly and the economy …. Funds invest in corporate bonds and may hold liquidity in the form of bank deposits to meet investor redemption requests …

In this paper, we construct a structural model to determine the costs of a bank rescue considering bail-outs and bail … abandon the bank. Given this trigger, the model also determines the bank rescue costs, the expected time to the bank rescue … and the bank rescue probabilities. A static analysis of our model produces several empirically testable hypotheses. The …

endogenous bank fragility and slow recovery from crises. When banks' investment decisions are not contractible, depositors form … expectations about bank risk-taking and demand a return on deposits according to their risk. This creates strategic … of bank net worth and lead to a "gambling trap" with a persistent drop in investment and output. I bring the model to …