Miller (1958) due to agency problems, deposit insurance, taxes, or any other distortions. Our model can explain (i) why bank … leverage increased over the last 150 years or so, (ii) why high bank leverage per se does not necessarily cause systemic risk …

Though overall bank performance from July 2007 to December 2008 was the worst since at least the Great Depression … performance of banks during the credit crisis. More specifically, we investigate whether bank performance is related to bank …-level governance, country-level governance, country-level regulation, and bank balance sheet and profitability characteristics before …

We investigate whether bank performance during the credit crisis of 2008 is related to CEO incentives and share … terms of accounting return on equity. Further, option compensation did not have an adverse impact on bank performance during … the crisis. Bank CEOs did not reduce their holdings of shares in anticipation of the crisis or during the crisis; further …

behavior. By paying out dividends, a bank transfers value to its shareholders away from creditors, among whom are other banks …. This way, one bank's dividend payout policy affects the equity value and risk of default of other banks. When such negative … externalities are strong and bank franchise values are not too low, the private equilibrium can feature excess dividends relative to …

We develop a model of the joint capital structure decisions of banks and their borrowers. Strikingly high bank leverage … emerges naturally from the interplay between two sets of forces. First, seniority and diversification reduce bank asset … underlie our structural model, we can quantify the impact capital regulation and other government interventions have on bank …