to individual banks in the Merton tradition (1974) as a combination put option for the deep tail of bank losses and a … knock-in stop-loss call on bank assets. This model expresses the value of taxpayer loss exposure from a string of defaults … the face value of the debt of the entire sector. We conceive of an individual bank's systemic risk as its contribution to …

, but increases in bank bargaining power could increase funding costs and/or decrease capital market access. Customers may … increased bank bargaining power, especially vis-a-vis credit-constrained customers for whom safety-net subsidies are unlikely to …

bank supervision and eventually produce banking crisis. For political reasons, most countries establish a regulatory … culture that embraces three economically contradictory elements: politically directed subsidies to selected bank borrowers …