-term domestic government bonds that could be pledged to obtain central bank liquidity. This "collateral trade" effect is large, as …We study the design of lender of last resort interventions and show that the provision of long-term liquidity … European Central Bank's three-year Long-Term Refinancing Operation incentivized Portuguese banks to purchase short …

Euro area governments have committed to break the doom loop between bank risk and sovereign risk. But policymakers have …. Simulations highlight a tension in regulatory design between concentration and credit risk. An area-wide low-risk asset - created … risk. …

terms of higher exposure to interest rate risk and lower net interest margin. …

models that support risk identification and calibration of tools. …

the existence of a public interest to resolve an ailing bank, rather than to open normal insolvency proceedings (NIPs … economy stemming from a bank's failure under NIPs through the interruption of the lending activity ("credit channel"). The … and households due to the abrupt closure of a bank. In a second step, the impact of the credit shortfall on real outcomes …

maturities with the risk of systemic crises. Pecuniary externalities make unregulated debt maturities inefficiently short. The …

The declared intention of policy makers is that future bank restructuring should be conducted through bail-in rather … implementation of bank resolution regimes, supporting the saying that actions speak louder than words. …

The euro crisis was fueled by the diabolic loop between sovereign risk and bank risk, coupled with cross-border flight …

advantage of their higher risk-bearing capacity to gain exposure (via central bank liquidity) to the set of riskier sovereign … strong link is present between central bank liquidity support and sovereign holdings, opportunistic strategies or reach … particular, we show that being a weakly capitalized bank is not related to higher holdings of domestic sovereign debt. While a …

build-up of systemic risk that may have adverse effects for the functioning of the financial system and for the real economy … these policy instruments is high. This uncertainty entails two risks: the risk of acting too late (inaction bias) and the … risk of choosing an inappropriate instrument or inadequate calibration. In this paper, we argue that both risks can be …