risks posed by individual banks but also, importantly, those posed by nonbanks and the system as a whole. The recent …

from domestic banks. As public debt approached sustainability limits in a number of countries, however, high bank exposure …

characteristics, such as capital and liquidity. We estimate the new model on the entire panel of US banks, spanning the period 1985q1 … establish that the risk of the relatively large banks and banks that failed in the subprime crisis is higher than the industry …’s average. Thus, we provide a new leading indicator, which is able to forecast future solvency problems of banks. …

little support for claims that fair-value accounting leads to excessive write-downs of banks' assets. If anything, empirical …