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 …

equity and towards deposits when creditor rights become stronger. These results suggest that bank equity, rather than … in bank leverage affect bank risk-taking. We find that increases in creditor rights increase bank risk-taking, but only …