banking groups. On this basis, the bail-in of a bank can be simulated to identify the direct contagion risk to the other banks …

We develop a structural model for valuing bank balance sheet components such as the equity and debt value, the value … for the government when the bank is operated by private shareholders including the present value of a possible future … bailout, the bailout value incurred by the government following the abandonment of the private shareholders, and, moreover …

endogenous bank fragility and slow recovery from crises. When banks' investment decisions are not contractible, depositors form … expectations about bank risk-taking and demand a return on deposits according to their risk. This creates strategic … of bank net worth and lead to a "gambling trap" with a persistent drop in investment and output. I bring the model to …

in line with the economic conditions they face. Bank responses feed back to the macroeconomic environment affecting …

of bank failures. We find that riskadjusted premiums reduce moral hazard, enabling the policymaker to increase deposit … insurance coverage by 3 percentage points and decrease the share of expected annual bank failures from 0.66% to 0.16%. The model …

This paper examines common regulation as cause of interbank contagion. Studies based on the correlation of bank assets … that banks have a common regulator. In our model, the failure of one bank can undermine the public's confidence in the … forbearance to the initially failing bank in the hope that it - and hence other vulnerable banks - survives. By contrast, public …