The recent crisis has underlined the importance of sound bank liquidity management. In response, regulators are … authors analyse the impact of liquid asset holdings on bank profitability for a sample of large U.S. and Canadian banks … that this relationship varies depending on a bank's business model and the state of the economy. These results are …

Bank regulation is based on the premise that risks spill over more easily from large banks to the banking system than … vice versa. On the contrary, we document that risk transmission is stronger in the system-to-bank direction. We term this … banks with positive net exposure to the system had higher default risk during the 2008 crisis, and that bank size and …

-efficient allocation that limits bank size. …

reducing contagion when an interconnected bank fails. Thus, the regulator faces a trade-off between efficiency and financial …

bank issues covered bonds backed by a pool of assets that is bankruptcy remote and replenished following losses …. Encumbering assets allows a bank to raise cheap secured debt and expand profitable investment, but it also concentrates risk on …