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 …

bank funding costs. We show that credit supply is dampened by the associated debt-overhang cost to bank shareholders. Until … offset if drawdowns are expected to be left on deposit at the same bank, which happened at some of the largest banks during …

. Using this framework, we show conditions under which idiosyncratic shocks to bank lending can generate aggregate … sector for many countries is indeed granular, as the right tail of the bank size distribution follows a power law. We then … concentration is associated with a positive and significant relationship between bank-level credit growth and aggregate growth of …

income gap. Secondly, we show that income gap also predicts the sensitivity of bank lending to interest rates. Quantitatively …, a 100 basis point increase in the Fed funds rate leads a bank at the 75th percentile of the income gap distribution to … increase lending by about 1.6 percentage points annually relative to a bank at the 25th percentile …