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 …

underlie our structural model, we can quantify the impact capital regulation and other government interventions have on bank … taking by banks, but increased risk taking by firms. Capital regulation lowers bank leverage but can lead to compensating …We develop a model of the joint capital structure decisions of banks and their borrowers. Strikingly high bank leverage …

-funded capital injections. However, on closer inspection the composition of bank capital shifted radically from one based on common … banks to lend over this period. We draw conclusions on how capital regulation may be reformed in light of our findings. …

conditions implementation on sufficient bank participation. Preferred stock plus warrants reduces opportunistic participation by … aggregate credit risk exceed the cost of implicit transfers to bank debt holders. …

We use payroll data on 1.2 million bank employee years in the Austrian, German, and Swiss banking sector to identify … document an economically significant correlation of incentive pay with both the level and volatility of bank trading income … share in the capital markets divisions with the strength of incentive pay in unrelated bank divisions like retail banking …

affects bank lending depends on whether the banks are drawing on official-sector liquidity facilities. Third, liquidity …

clears only at fire-sale prices following a large number of bank failures. The gains from acquiring assets at fire …-sale prices make it attractive for banks to hold liquid assets. We show that the resulting choice of bank liquidity is counter … crises may be desirable ex post. However, policies aimed at resolving crises affect ex-ante bank liquidity in subtle ways …