that banks have a common regulator. In our model, the failure of one bank can undermine the public's confidence in the … competence of the banking regulator, and hence in other banks chartered by the same regulator. Thus depositors may withdraw funds … from other, unconnected, banks. The optimal regulatory response to this 'panic'; behaviour can be to privately exhibit …

In 2001, government guarantees for savings banks in Germany were removed following a law suit. We use this natural …/borrower information. The results suggest that banks whose government guarantee was removed reduced credit risk by cutting off the riskiest … borrowers from credit. At the same time, the banks also increased interest rates on their remaining borrowers. The effects are …

confidential database on banks' bilateral exposure and employing a country-pair panel instrumental variables approach. Countries …

Banks increasingly use short-term wholesale funds to supplement traditional retail deposits. Existing literature mainly … points to the "bright side" of wholesale funding: sophisticated financiers can monitor banks, disciplining bad but …, e.g., when banks hold mostly relationship-based small business loans. - Financial Crises ; Liquidity Risk ; Wholesale …

We investigate the effect of securitization activity on banks’ lending standards using evidence from pricing behavior … on the syndicated loan market. We find that banks more active at originating asset-backed securities are also more …. Macroeconomic factors also play a large role explaining the impact of securitization activity on bank lending standards: banks more …

level for the banks that have been subject of the 2018 EBA stress tests. Therefore, we perform a holistic review of the …

How do banks set their target capital ratio? How do they adjust to reach it? This paper answers these questions using … an original dataset of capital ratio targets directly announced to investors by European banks, materially improving data … capital requirements and a procyclical behavior consistent with market pressure. Second, banks do not distinguish between the …

evidence that supervisory scrutiny associated to stress testing has a disciplining effect on bank risk. We ftnd that banks that … participated in the 2016 EU-wide stress test subsequently reduced their credit risk relative to banks that were not part of this … interactions between banks and supervisors during the stress test, we find that the disciplining effect is stronger for banks …

We study the relationship between banks' size and risk-taking in the context of supranational banking supervision …-big-to-fail effect, we find an inverse relationship between banks' size and non-performing loan growth for a sample of European banks …-up rather than incentives alignment among the supervisors and the banks. …