bank-based to capital market-based financial systems, nor for a loss of importance of banks. Only in the case of France … mobilizers of capital from the non-financial sectors. In combination with the trend towards securitization of bank liabilites …

Government-nanced bank restructuring programs, occasionally costing up to 50% of GDP,are commonly used to resolve … costs under dierent nancingoptions. In our model bank credit is essential, due to a working capital constraint onrms, and …

),1 which leads to “fire-sale”–related pecuniaryexternalities; and bank interconnectedness (Allen and Gale2000; Kahn and Santos …

the 1980s deregulation of restrictions thatprohibited bank expansion across geographic markets and intoother financial …

A large literature studies bank regulatory policies intendedto control moral hazard problems associated with … depositinsurance and optimal regulatory design. Much of theanalysis has focused on uniform bank capital requirements,risk-based capital ….All formal analyses employ highly simplifiedtreatments of an individual bank or banking system. Thisstudy is concerned with the …