institutions, or shadow banks, may not fall under their jurisdiction. We study the effects of tightening commercial bank regulation … commercial banks and a shadow banking system that relies on funding in a perfectly competitive market for investments. After … estimating the model using euro area data from 1999-2014 including information on shadow banks, we find that tighter capital …

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 …

Net trading income is an important but volatile source of income for many euro area banks, highly sensitive to changes … in financial market conditions. Using a representative sample of European banks, we study the distribution of net trading … income distribution from which we quantify tail risk measures and expected losses across banks. We find a heterogeneous 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 …

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 …

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 … capital and liquidity requirements, and other supervisory limits. The responses of banks impact credit supply conditions and …