Outright bank failures without prior indication of financial instability are very rare. Supervisory authorities monitor … regarded as troubled to varying degrees before outright closure. But to our knowledge virtually all studies that predict bank … failures neglect the ordinal nature of bank distress. Exploiting the distress database of the Deutsche Bundesbank we …

that due to its size, a large bank receives a more precise signal about the overall liquidity development in the banking … sector. In an upcoming liquidity shortage this large bank can exploit its informational advantage in the spot money market by … rationing liquidity. Using forward contracts, the large bank can credibly commit not to squeeze small banks in the event of a …

signal on bank project quality, short-term wholesale financiers have lower incentives to conduct costly monitoring, and …

Banks hold liquid and illiquid assets. An illiquid bank that receives a liquidity shock sells assets to liquid banks in …

funds and the optimal policy of a central bank in response to liquidity shocks. We show that, when confronted with a … distributional liquidity-shock crisis that causes a large disparity in the liquidity held by different banks, a central bank should … erodes financial stability by increasing the probability of bank runs. …

Why do banks remain passive? In a model of bank-firm relationship we study the trade-off a bank faces when having … defaulting firms declared bankrupt. First, the bank receives a payoff if a firm is liquidated. Second, it provides information … about a firm’s type to its competitors. Thereby, asymmetric information between banks is reduced and bank competition …

, small, and innovative firms) have a multitude of bank lenders, where one may be special in the sense of relationship lending …. However, theory does not tell us a lot about the economic rationale for relationship lending in the context of multiple bank … financing. To fill this gap, we analyze the optimal debt structure in a model that allows for multiple but asymmetric bank …

ability of a bank to restructure the borrower's firm in the case of distress, the possibility to appropriate private benefits …

, small, and innovative firms) have a multitude of bank lenders, where one may be special in the sense of relationship lending …. However, theory does not tell us a lot about the economic rationale for relationship lending in the context of multiple bank … financing. To fill this gap, we analyze the optimal debt structure in a model that allows for multiple but asymmetric bank …