Under the New Basel Accord bank capital adequacy rules (Pillar 1) are substantially revised but the introduction of two …

We study a modification of the Diamond and Dybvig (1983) model in which the bank may hold a liquid asset, some … depositors see sunspots that could lead them to run, and all depositors have incomplete information about the bank's ability to … survive a run. The incomplete information means that the bank is not automatically incentivized to always hold enough liquid …

bank risk taking, commercial bank failure, interest rates on loans, and market structure. We propose a market structure … addition to aggregate shocks to the fraction of performing loans in their portfolio. A nontrivial bank size distribution arises … consistent with untargeted business cycle properties, the bank lending channel, and empirical studies of the role of …

monetary policy. The theory unifies an endogenous supply of illiquid local loans and risk-sharing among subsidiaries of bank …

, including any effects on the cost of capital and in turn the rates available to borrowers. Standard theory predicts that, in …

Bank risk-based capital (RBC) standards require banks to hold differing amounts of capital for different classes of … weights accurately reflect bank asset risk, we find that the weights fail even in their limited goal of correctly quantifying … are considered in the RBC regulations. We also examine other types of bank risk by estimating a simple factor model that …

We develop a new identification strategy to evaluate the impact of the geographic expansion of bank holding company … (BHC) assets across U.S. metropolitan statistical areas (MSAs) on BHC risk. We find that the geographic expansion of bank …