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 …

This paper studies the impact of voluntary climate commitments by banks on their lending activity. We use … administrative data on the universe of bank lending from 19 European countries. There is strong selection into commitments, with … increased participation by the largest banks and banks with the most pre-existing exposure to high-polluting industries. Setting …

Can banks trade credit default swaps (CDSs) referenced on their current corporate clients at competitive prices, or are … banks penalized for potentially holding private information? To answer this question we merge CDS trades reported under the … that the same dealer offers to banks and to other investors. We find that banks lending to a corporation purchase CDSs on …

We analyze the effect of bank capital requirements on the structure and risk of a financial system where markets …, regulated banks, and shadow banks coexist. Banks face a moral hazard problem in screening entrepreneurs' projects, and they … the market and riskier entrepreneurs borrow from banks. But risk-insensitive (sensitive) requirements are especially …

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 …

We show that negative monetary policy rates induce systemic banks to reach-for-yield. For identification, we exploit … the introduction of negative deposit rates by the European Central Bank in June 2014 and a novel securities register for … the 26 largest euro area banking groups. Banks with more customer deposits are negatively affected by negative rates, as …

How a historic drop in bank deposits shapes banks' loan supply? We exploit the effects of a large, and unexpected … includes all bank-firm lending relationships in all euro area countries. We find that banks experiencing large deposit outflows … is stronger for fixed rate and longer maturity loans, but not for riskier borrowers. The effect is mostly driven by banks …

how the transmission depends on bank balance sheets, and how this changes once policy rates become negative. We review the … growing evidence that negative policy rates are special because the pass-through to banks' retail deposit rates is hindered by … a zero lower bound. We summarize existing work on the impact of negative rates on banks' lending and securities …

overnight unsecured loans. Using proprietary bank-level data, we find that interbank rate uncertainty signi cantly raises … and the 2010-2012 European sovereign crisis. This effect is attenuated for banks with lower credit risk, sounder capital … positions and greater access to central bank funding. …