dividends and inefficient recapitalization relative to the efficient policy that maximizes banking sector equity. We compare the …

was exacerbated by large scale payments of dividends, in spite of widely anticipated credit losses. Dividend payments …

In spite of mounting losses banks continued to pay dividends during the crisis. We present a model that addresses this … behavior. By paying out dividends, a bank transfers value to its shareholders away from creditors, among whom are other banks … externalities are strong and bank franchise values are not too low, the private equilibrium can feature excess dividends relative to …

-determined dividends, strategic debt-service can actually result in a narrowing of yield spreads. In summary, our results indicate that …