the COVID-19 pandemic, we use the European bank stress test results as a natural experiment, in which all banks are … analyzes the implications of the change from IAS 39 to IFRS 9 in the context of bank resilience. We shed light on two effects … bank resilience through lower capital levels. In the absence of archival data of IFRS 9 and their potential biases due to …

provisions tend to be more procyclical at larger and better capitalized banks. The procyclicality of loan loss provisions can … explain about two-thirds of the variation of bank capitalization over the business cycle. We estimate that provisioning … procyclicality in the euro area is about twice as large as in other advanced economies. This difference reflects a larger …

models of financial frictions. Banks can reject borrowers whose risk is above an endogenous threshold at which no lending … rate sufficiently compensates banks for the borrowers' default risk. Firms denied credit cut employment and labor … reallocates mostly towards safer producers. Lending standards propagate bank capital shortfalls through labor misallocation …

investment in a model in which firms borrow from both bank and non-bank lenders. The bank funds loans with insured deposits and … costly equity, monitors borrowers, and must maintain a minimum capital to asset ratio. Non-banks have deep pockets and … competitively price loans. A tight capital requirement on the bank reduces risk-shifting and decreases bank leverage, reducing the …

bank-firm level credit data, we show that banks reallocate credit within their loan portfolio in at least three different …This paper provides evidence on the strategic lending decisions made by banks facing a negative funding shock. Using … ways. First, banks reallocate to sectors where they have a high market share. Second, they also reallocate to sectors in …

area banks with that of the euro area economies. It reflects banks' heterogeneity by replicating the structure of their … balance sheets and profit and loss accounts. In the model, banks adjust their assets, interest rates, and profit distribution … in line with the economic conditions they face. Bank responses feed back to the macroeconomic environment affecting …

area banks with those of individual euro area economies. It reflects the heterogeneity of banks by replicating the … structure of their balance sheets and profit and loss accounts. Additionally, it allows banks to adjust their assets, funding … mix, pricing decisions, management buffers, and profit distribution along with individual bank conditions, including their …