We find that stricter merger control legislation increases abnormal announcement returns of targets in bank mergers by …

We develop a novel dynamic model of banking showing that aggregate bank capital is an important determinant of bank …. Because of this financial friction, banks build equity buffers to absorb negative shocks. Aggregate bank capital determines …

contributes to the current debate on the optimal scope of bank activities, and highlights novel channels through which …

We present a theory in which the key driver of short-term debt issued by the financial sector is the portfolio demand …

bank's financing structure. In our model the bank's assets consist of illiquid loans and liquid reserves and are financed … to an exogenous rollover risk. We show that the use of repos inflicts two types of indirect (“shadow”) costs on the bank …'s shareholders: first, it induces the bank to maintain higher liquid reserves in order to alleviate the additional default risk …

regulatory requirements. Our analytic characterization of the bank policy choices shows that imposing solely liquidity … requirements leads to lower bank losses in default at the cost of an increased likelihood of default. Combining liquidity … requirements with leverage requirements reduces drastically both the likelihood of default and the magnitude of bank losses in …

reducing precautionary savings and hence bank deposits – households' major saving instrument. In this paper, we use this lower … show that when state UI benefits become more generous bank deposits decrease. Since deposits are the main and uniquely … stable funding source for banks, the decrease in deposits squeezes bank commercial lending, which in turn reduces firm …

This paper studies the effects of the bank capital requirements imposed by the European authorities in October 2011 on … granted by a representative Spanish bank and several subsidiaries to nonfinancial corporations around that date. We document …