One aim of post-crisis monetary policy has been to ease credit conditions for borrowers by unlocking bank lending. We … find that bank equity is an important determinant of both the bank's funding cost and its lending growth. In a cross …-country bank-level study, we find that a 1 percentage point increase in the equity-to-total assets ratio is associated with a 4 …

dynamic model of optimal bank liability structure that incorporates bank runs, regulatory closure and endogenous default …. Using the supervisory data provided by the Bank of Italy, we empirically test these predictions by exploiting exogenous … bank: well-capitalized banks respond to a reduction in tax rates by increasing their assets, but poorly-capitalized banks …