decompose the welfare effects of bank capital regulation to demonstrate the effects of exuberance and its interaction with … evidence on the relationship between bank capital and risk-taking. Finally, I investigate the sensitivity of these insights …

either assume that the effects of bank capital shocks are linear or ignore feedback effects and the impact on the … are typically associated with low bank margins and profitability, also lead to a larger decline in lending. De-risking is …

We develop a structural model for valuing bank balance sheet components such as the equity and debt value, the value … for the government when the bank is operated by private shareholders including the present value of a possible future … the bank. In this case, the shareholders lose part (or all) of the capital that they hold in the bank, the creditors lose …

Loan guarantees represent a form of government intervention to support bank lending. However, their use raises concerns … as to their effect on bank risk-taking incentives. In a model of financial fragility that incorporates bank capital and a … bank incentive problem, we show that loan guarantees reduce depositor runs and improve bank underwriting standards, except …

framework were more likely to require public support during the crisis. We instrument some characteristics of bank balance … sheets with these prudential indicators to investigate how they affect bank resilience. The share of non-interest income …

of bank failures. We find that riskadjusted premiums reduce moral hazard, enabling the policymaker to increase deposit … insurance coverage by 3 percentage points and decrease the share of expected annual bank failures from 0.66% to 0.16%. The model …

This paper examines common regulation as cause of interbank contagion. Studies based on the correlation of bank assets … that banks have a common regulator. In our model, the failure of one bank can undermine the public's confidence in the … forbearance to the initially failing bank in the hope that it - and hence other vulnerable banks - survives. By contrast, public …