risk taking and real economic activity. First, we analyze how changes in funding affect the supply of bank loans. We then … liquidity risk by supplying long-term loans with short-term funding. We also find that mortgage lending by banks relying more on …

We formalize the idea that the financial sector can be a source of non-fundamental risk. Households' desire to hedge … against price volatility can generate price volatility in equilibrium, even absent fundamental risk. Fearing that asset prices … may fall, risk-averse households demand safe assets from leveraged intermediaries, whose issuance of safe assets exposes …

discourages short-term inflows mainly through portfolio risk and precautionary saving channels. A markup channel generates net FDI … irreversibility of FDI, the currency of export invoicing, risk aversion of outside agents, and effective lower bound in the rest of …

the guiding principle for banks is to maximize risk-adjusted returns generated by their balance sheets. We parameterize …

This paper studies the relationship between bank holding company affiliation and the individual and systemic risk of …

risk to the sector, with implications for the macroeconomy. Models of the complex interactions among reinsurers and with … and that the size of the potential market disruption is sensitive to (i) the distribution of risk among counterparties …. The findings suggest that further study of industry practices in these four areas would improve our ability to assess risk …

The present paper shows that, everything else equal, some transactions to transfer portfolio credit risk to third …-party investors increase the insolvency risk of banks. This is particularly likely if a bank sells the senior tranche and retains a … sufficiently large firstloss position. The results do not rely on banks increasing leverage after the risk transfer, nor on banks …