How large should a team be? We develop a basic group work model with endogenous team size. In teams that are too small, complementarities cannot develop properly, whereas in teams that are too large, the free-rider problem becomes overwhelming. If team members are overconfident, effort levels...

This paper discusses the relationship between bank size and risk-takingunder Pillar I of the New Basel Capital Accord.

In diesem Aufsatz gehen wir der Frage nach, welche Rolle regionale Banken in einer globalisierten Welt spielen können. Wir argumentieren, dass regionale Banken aufgrund einer stärkeren Kundenbindung und flacher Hierarchien Wettbewerbsvorteile realisieren können. Kostennachteile aufgrund der...

In the current recession, politicians grant state aid of yet unknown dimensions. But whatis the most efficient measure for granting such aid? We use a theoretical model withfirms that differ in their creditworthiness and compare different types of direct subsidieswith indirectly subsidized...

Spitzenpolitiker deutscher Volksparteien propagieren öffentlich die Förderung nationaler Champions im Bankwesen. Auch andere Institutionen fordern eine Konsolidierung des Bankwesens und verweisen dabei auf die schwache Rentabilität und die geringe Konzentration deutscher Banken. Wir...

The explicit or implicit protection of banks through government bail-out policies is a universal phenomenon. We analyze the competitive effects of such policies in two models with different degrees of transparency in the banking sector. Our main result is that the bail-out policy unambiguously...

Should the European Union grant state aid through an institution like the European Investment bank? This paper evaluates the efficiency of different measures for granting state aid. We use a theoretical model with firms that differ in their creditworthiness and compare different types of...

This paper discusses the relationship between bank size and risk-taking under Pillar I of the New Basel Capital Accord. Using a model with imperfect competition and moral hazard, we find that small banks (and hence small borrowers) may profit from the introduction of an internal ratings based...

This paper yields a rationale for why subsidized public banks may be desirable from a regional perspective in a financially integrated economy. We present a model with credit rationing and heterogeneous regions in which public banks prevent a capital drain from poorer to richer regions by...

Should the European Union grant state aid through an institution like the European Investment bank? This paper evaluates the efficiency of different measures for grant-ing state aid. We use a theoretical model with firms that differ in their creditworthiness and compare different types of...