sources of procyclicality, focusing on the potential procyclical effect of the current Basel II regulatory framework for banks …This paper examines procyclicality of the financial system. The introduction describes the natural and regulatory … feedback loop whereby banks, in response to an economic downswing, engage in deleveraging and reduce their lending to the …

We analyze the cyclicality of risk weights of banks in the Czech Republic from 2008 to 2016. We differentiate between …

with recent research, but introduce asset choice and sovereign debt holdings in the portfolio of banks. Using this model …, we emphasize a new crowding-out mechanism that works through reduced private access to credit when banks accumulate … effectiveness of liquidity supportto commercial banks through recapitalizations or loans by the government and the impact of …

show that the risk allocation is efficient, provided that banks are not bailed out. In this case, banks may shift part of … banks are bailed out, depositors receive non-contingent contracts with high interest rates, while entrepreneurs obtain loan … overinvests, and banks create large macroeconomic risks for future generations, even if the underlying risk is small or zero. …

financial intermediation as delegated monitoring. The analysis shows that the quality of corporate governance of banks is the …

Even though the sector of Non-bank financial intermediaries (NBFI) or shadow banks represent a large part of the …

-based (IRB) approach, as defined in the new Basle Accord. We consider a model in which sophisticated banks, eligible for the IRB … approach, and unsophisticated banks, eligible for the standardized approach, allocate their loan portfolio between high …-risk and lowrisk borrowers. We find that the co-existence between the two regimes may induce sophisticated banks to decrease …

invest socially optimally, because they ignore the systemic costs of failure and, in the case of banks, because they fail to … social costs of these effects. We show that banks should always have higher regulatory capital requirements than insurance … companies. Contrary to received wisdom, when banks and insurance companies combine to form financial conglomerates we show that …