as a fraction of bank revenues, thus relating politicians' welfare to the size of banks. This induces politicians to …

strength of this automatic stabilization. Second, there is a mix of publicly financed bank re-capitalization, dividend payout … restrictions, and consumption taxes that stimulates a Pareto-improving rapid build-up of bank equity and accelerates economic …: procyclical bank leverage, procyclical bank lending, and countercyclical bond financing. Fourth, the framework preserves its …