A model of loan rate competition with liquidity provision by banks is used to study bank mergers. Both loan rate … competition and liquidity needs are seen to be "localised" phenomena. This allows for tracing down the effects of particular types … of bank mergers. As such, we contrast the effects of "revenue base enhancing" mergers with the effects of mergers "for …

A growing body of literature indicates that competition increases bank soundness. Applying an industrial organization … indeed increases bank efficiency. Second, building on these results, we examine the relation between the Boone indicator … bank soundness. We find evidence that competition robustly increases bank soundness, via the efficiency channel. …

incentives to take risk and raise failure probabilities. The competition-stability trade-off is characterized and the … implications of the analysis for regulation and competition policy are derived. It is found that optimal regulation may depend on …

We model the impact of bank mergers on loan competition, reserve holdings and aggregate liquidity. A merger changes the … distribution of bank sizes and aggregate liquidity needs. Mergers among large banks tend to increase aggregate liquidity needs and … thus the public provision of liquidity through monetary operations of the central bank. …

disciplining banks' risk choice. Comparisons are conducted between equity, subordinated debentures (SD), and uninsured deposits (UD … incorporate charter value and competition for depositors into their risk-taking decision. The paper's main finding is that …

in the deposit market and depressing other banks? margins. In contrast, the effects on the protected bank?s risk … main result is that the bail-out policy unambiguously leads to higher risk-taking at those banks that do not enjoy a bail …-out guarantee. The reason is that the prospect of a bail-out induces the protected bank to expand, thereby intensifying competition …

explains why liquidity cannot easily be apprehended through a single statistics, and asks whether liquidity should be regulated … and to information acquisition. It then looks at what economics can contribute to the debate on systemic risk and its … containment. Finally, the paper takes a macroeconomic perspective, discusses shortages of aggregate liquidity and analyses how …