lending. In our model commercial banks finance their loans with deposits and equity, while facing equity issuance costs …. Because of this financial friction, banks build equity buffers to absorb negative shocks. Aggregate bank capital determines … competitive equilibrium is constrained inefficient, because banks do not internalize the consequences of individual lending …

"critical" debt-equity ratio which depends only on the risks inherent in the banks' productive loans. When the natural debt …

This paper integrates banks into a two-sector neoclassical growth model to account for the fact that a fraction of … firms relies on banks to finance their investments. There are four major contributions to the literature. First, although … banks' leverage amplifies shocks, the endogenous response of leverage to shocks is an automatic stabilizer that improves the …

about banks' future payment volumes. It is shown that the optimal pricing scheme for a public monopoly system involves … systems. The structure of the optimal tariff depends on the willigness of Central Banks to allow by-pass. …

The classical Bagehot’s conception of a Lender of Last Resort (LOLR) that lends to illiquid banks has been criticized … fully collateralized repo market allows Central Banks to provide the adequate aggregated amount of liquidity and leave the … responsibility of lending uncollateralized to the banks. The object of this paper is to analyze rigorously these issues by providing …

as the subsidy needed for private banks to internalize the cost of systemic risk. In either interpretation, the public … good factor is easy to measure: it corresponds to the subsidy needed for private banks to allocate their payments in the …

The classical Bagehotu0092s conception of a Lender of Last Resort (LOLR) that lends to illiquid banks has been … fully collateralized repo market allows Central Banks to provide the adequate aggregated amount of liquidity and leave the … responsibility of lending uncollateralized to the banks. The object of this paper is to analyze rigorously these issues by providing …

On 5-6 September 2012 SUERF held its 30th Colloquium “States, Banks, and the Financing of the Economy” at the …

. Hence, banks build up larger capital buffers which (i) lowers the public losses in case of a systemic crisis and (ii …