The paper uses recent developments of the methodology of efficiency frontiers to provide an original modeling of the risk of volatility of banking profits which relies on the estimation of a profit frontier. This methodology allows taking into account coordinated adjustments of banks’ costs to...

This study provides responses to the question of the effectiveness of Loan-To-Value (LTV) and Debt Service-To-Income (DSTI) caps to contribute to financial stability. Using a lender’s risk management perspective, the paper provides a new methodology extending the standard asymptotic single...