assets and lending allocations fall to 22 percent. Banks with low risk tolerance or less access to liquidity are particularly …This paper empirically investigates banks' investment allocations over the recent business cycle. I identify … the pre-recession period, banks lend 38 percent of incremental deposits; however, during the downturn, banks favor liquid …

trillion in response to the COVID-19 pandemic. However, whereas banks' reserves at the Federal Reserve have decreased, the … diff-in-diff approach. By exploiting a temporary change in the computation of banks' Supplementary Leverage Ratio (SLR …) implemented in 2020-21, we show that banks' balance sheet costs incentivize them to push deposits toward MMFs and to reduce their …

This paper investigates the incentives for banks to bias their internally generated risk estimates. We are able to … by low-capital banks to improve regulatory ratios. At the portfolio level, the difference in borrower probability of … credits. In addition, we find that low-capital banks' risk estimates have less explanatory power than those of high …

We examine liquidity creation per unit of assets by banks subject to the Liquidity Coverage Ratio (LCR) using the … asset pair with different LCR weights, and the differential implementation of LCR by the very large and less-large LCR banks …. We find that, since 2013, there has been reduced liquidity creation by LCR banks compared to non-LCR banks, occurring …

We estimate the cost of capital for the banking industry and find that while the cost of capital soared for banks in … the financial crisis, after the passage of the Dodd-Frank Act, the value-weighted cost of capital for banks fell … differentially more than did the cost of capital for nonbanks. The very largest banks drive the decline in expected returns. Over a …

Historically, nonfinancial corporations relied on performance targets linked to their EPS. Up until the 1970s, banks … explaining banks' market values. In this paper we present a model of a bank with fixed-rate deposit insurance that faces …

, which are free from CRA obligations, to banks in need of CRA-eligible mortgages. Our findings underscore the pitfalls of a …

network. We estimate that the impairment of any of the five most active U.S. banks will result in significant spillovers to … other banks, with 38 percent of the network affected on average. The impact varies and can be larger on particular days and … in geographies with concentrated banking markets. When banks respond to uncertainty by liquidity hoarding, the potential …