This paper empirically examines how capital affects a bank's performance (survival and market share), and how this …

Banks hold liquid and illiquid assets. An illiquid bank that receives a liquidity shock sells assets to liquid banks in … the market equilibrium is constrained inefficient, with too little liquidity and inefficient hoarding. Our model features … a precautionary as well as a speculative motive for hoarding liquidity, but the inefficiency of liquidity provision can …

during both bank crises and market crashes, with the bond market moving the same direction as bank credit. The result …, however, is significant for market-based countries but not significant for bank-based countries. As emerging markets are … mainly bank-based it may provide an explanation why it takes more time for them to recover from economic downturn after a …