This paper addresses the macroeconomic impact of international financial integration. I first provide empirical evidence that foreign banking penetration can be associated with a contraction of banking credit, especially in countries with poor credit markets. Second I present a model in which...

Using a large panel of about 6,946 French manufacturing firms, this paper investigates the effect of monetary policy from 1990 to 1999 on investment through the cost of capital and the cash-flow channels. We compare several specifications of the neo-classical demand for capital, taking into...

By introducing a structure of the balance sheets of the banks, which takes into account their bilateral exposures in terms of stocks or lendings, we get a structural model for default analysis. This model allows distinguishing the exogenous and endogenous default dependence. We prove the...

Basel III is the result of the continuous effort made by the Basel Committee on Banking Supervision to enhance the banking regulatory framework. It seeks to improve the banking sector's ability to deal with financial and economic stress, improve risk management and strengthen the banks'...

This paper tries a conceptual framing of the issue of financial stability in economic theory and also to identify solutions to address episodes of financial instability. An essential reference is Minsky's financial instability hypothesis, which argues that a fundamental feature of the financial...

In this paper the authors examine the current situation of the banks that were considered “too-big-to-fail” back in 2008, if the health of these banks is now more critical to the worldwide economy than ever. It is widely recognized that stronger financial crisis that began in 2007 in the...

The financial crisis has demonstrated that self-regulation is not sufficient to markets and financial institutions with systemic importance. Permissive regulatory policies, allowing the development speed of global banking financial system, have played an important role in emphasizing the upward...

We analyze the risk-taking behavior of heterogenous intermediaries that are protected by limited liability and choose both their amount of leverage and the risk exposure of their portfolio. Due to the opacity of the financial sector, outside providers of funds cannot distinguish “prudent”...