We model the impact of bank mergers on loan competition, banks' reserve holdings and aggregate liquidity. Banks compete … in liquidity risk and expected liquidity needs for each bank and for the banking system. Large mergers tend to increase … expected aggregate liquidity needs, and thus the liquidity provision by the central bank. Comparative statics suggest that a …

We develop a dynamic structural model of bank behaviour that provides a microeconomic foundation for bank capital and …

We contribute to the empirical literature on the impact of shocks to bank capital in the euro area by estimating a … economy, namely a demand shock and a shock to bank capital. The main findings of the paper are as follows: i) Impulse …-response analysis shows that in response to a shock to bank capital, banks boost capital ratios by reducing their relative exposure to …

results enhanced price discrimination as the impact on bank CDS spreads and equity prices tended to be stronger for the weaker …

presumably unaffected by the sovereign crisis insofar as they could count on the actual or potential support of their parent bank …