College) gave the SUERF 2015 Annual Lecture on Capital and Banks. The conference focused on core aspects of banking reform …

on banks’ internal ratings on loans to businesses over the period 1997 to 2011 from the Federal Reserve’s survey of terms … of business lending. We find that ex-ante risk taking by banks (measured by the risk rating of new loans) is negatively … with the nationwide business cycle, and less pronounced for banks with relatively low capital or during periods of …

on the internal ratings of U.S. banks on loans to businesses over the period 1997 to 2011 from the Federal Reserve …’s survey of terms of business lending. We find that ex-ante risk taking by banks (as measured by the risk rating of the bank’s … pronounced for banks with relatively low capital or during periods when banks’ capital erodes, such as episodes of financial and …

their portfolios. When banks can adjust their capital structures, monetary easing unequivocally leads to greater leverage … and higher risk. However, if the capital structure is fixed, the effect depends on the degree of leverage: following a … policy rate cut, well capitalized banks increase risk, while highly levered banks decrease it. Further, the capitalization …

Do low interest rate environments lead to greater bank risk-taking? We show that, when banks can adjust their capital … structures, reductions in real interest rates lead to greater leverage and higher risk for any downward sloping loan demand … function. However, if the capital structure is fixed, the effect depends on the degree of leverage: following a decrease in …

, financial innovations can be “deadly weapons” if abused, allowing financial institutions to further boost excessive leverage and …

is a more accommodative macroprudential environment. These effects are stronger for less capitalised banks. Results apply …) productive firms than firms with high ex ante credit risk, except for banks with low capital. …

We evaluate the role of insider ownership in shaping banks' equity issuances in response to the global financial crisis …. We construct a unique dataset on the ownership structure of U.S. banks and their equity issuances and discover that … between bank equity and lending, the results stress that ownership structure can shape the resilience of banks-and hence the …