system. We substantiate this argument with three didactic findings: (1) commercial banks in general were prone to engage in … channeling risky entrusted loans; (2) shadow banking through entrusted lending masked small banks' exposure to balance …-sheet risks; and (3) two well-intended regulations and institutional asymmetry between large and small banks combined to give …

Bank risk-based capital (RBC) standards require banks to hold differing amounts of capital for different classes of … decomposes loan risk into term structure, default, and market risk. One implication of our findings is that although banks have …

data on 147 banks over the decade of the 1980s, we find evidence supporting the hypothesis that competitive corporate …

The passage of the National Banking Acts stabilized the existing financial system and encouraged the entry of 729 banks … between 1863 and 1866. The national banks not only attracted more deposits than previous state banks, but also concentrated in …

the two ways in which U.S. commercial banks organized their investment banking operations before the 1933 Glass …-Steagall Act forced the banks to leave the securities business: as an internal securities department within the bank and as a … underwriting activities from lending operations, banks could more credibly certify the quality of the issues they underwrote …

document the limits of the shadow bank substitution margin: shadow banks substitute for traditional—deposit-taking—banks in … balance sheet retention margin: banks switch between traditional balance sheet lending and selling loans based on their … balance sheet strength, behaving more like shadow banks following negative shocks. Motivated by this evidence, we build and …