We show that negative monetary policy rates induce systemic banks to reach-for-yield. For identification, we exploit … the 26 largest euro area banking groups. Banks with more customer deposits are negatively affected by negative rates, as … higher returns. Effects are stronger for less capitalized banks, private sector (financial and non-financial) securities and …

When the Covid-19 crisis struck, banks using internal-rating based (IRB) models quickly recognized the increase in risk … and reduced lending more than banks using a standardized approach. This effect is not driven by borrowers' quality or by … banks in countries with credit booms before the pandemic. The higher risk sensitivity of IRB models does not always result …

supervision is stronger for banks operating in stressed countries. Exploiting heterogeneity across banks, we find that the …

Euro area governments have committed to break the doom loop between banks and sovereigns. But policymakers disagree on … reallocation by banks in response to regulatory reform. Simulations highlight a tension between concentration and credit risk in … opportunity set to include an area-wide low-risk asset. By reinvesting into such an asset, banks would reduce both their …

bank-dependent firms to their lenders and accounting for the effect of CSPP on banks' activity in the syndicated loan … banks relatively more exposed to CSPP-eligible firms. Unlike in previous studies, this result applies regardless of bank …

. Using a theoretical micro model, we show that a leverage ratio requirement can incentivise banks that are bound by it to … capital and therefore increased lossabsorbing capacity, thereby leading to more stable banks. These theoretical predictions … are tested and confirmed in an empirical analysis on a large sample of EU banks. Our baseline empirical model suggests …

European banks. In this paper, we evaluate the possible effects of these constraints on risk and diversification in the … sovereign bond portfolios of the major European banks. First, we capture the dependence structure of European countries … analysis. We then analyse the risk and diversification in the sovereign bond portfolios of the largest European banks and …

implementation of the CRD and derive a country measure of regulatory flexibility (for all banks in a country) and of supervisory … discretion (on a case-by-case basis). Overall, we find that banks established in countries with a less stringent prudential … crisis. Prudential frameworks also explain banks' liquidity buffers even in absence of a specific liquidity regulation, which …

I propose a dynamic general equilibrium model in which strategic interactions between banks and depositors may lead to … endogenous bank fragility and slow recovery from crises. When banks' investment decisions are not contractible, depositors form … complementarities and possibly multiple equilibria: in response to an increase in funding costs, banks may optimally choose to pursue …