We consider a model in which the threat of bank liquidations by creditors as well as equity-based compensation … incentives both discipline bankers, but with different consequences. Greater use of equity leads to lower ex ante bank liquidity …, whereas greater use of debt leads to a higher probability of inefficient bank liquidation. The bank's privately …

diminish the value of the bank's core intermediation service? Using a banking model in which borrowers face production output …, thereby enhancing liquidity creation and the value of intermediation. Higher bank capital leads to more trading states and … that subsidizes sellers or a (selective) subsidy for buyers. Central bank loan purchases can also improve welfare …

The role that banks play in screening and monitoring their borrowers is well understood. However, these bank activities … question – who monitors the monitor? Financial intermediation theories posit that bank capital structure plays such a role in … incentivizing banks to monitor their borrowers. Both bank debt and bank equity have been proposed in various theories as providing …

steady growth following the crisis. We find that bank CEO pay is sensitive to ROE and stock return, but not to ROA. Bank CEOs … metrics than non-bank financial or non-financial CEOs. In terms of the level of pay, bank CEOs earn less than both non-bank … financial and non-financial firm CEOs. The lower relative bank CEO pay is driven by lower salary, nonequity incentive and stock …

ap- point independent directors on the board of an assisted bank that missed six dividend payments to the Treasury … payments exhibits a sharp discontinuity at five. Director appointments by the Treasury led to improved bank performance, lower …

appoint independent directors on the board of an assisted bank that missed six dividend payments to the Treasury - helped … exhibits a sharp discontinuity at five. Director appointments by the Treasury led to improved bank performance, lower CEO pay …

aggregate lending. The model predicts that the bank's decision to lend will cause an abnormal runup in the borrower's stock … price and that this reaction will be greater the more capital-constrained the bank. I provide empirical support for this … prediction. The model explains the recent inability of the Federal Reserve to stimulate bank lending by increasing the money …

We develop a theory of optimal bank leverage in which the benefit of debt in inducing loan monitoring is balanced … against the benefit of equity in attenuating risk-shifting. However, faced with socially-costly correlated bank failures …

We develop a theory of optimal bank leverage in which the benefit of debt in inducing loan monitoring is balanced … against the benefit of equity in attenuating risk-shifting. However, faced with socially-costly correlated bank failures …