Europe’s financial structure has become strongly bank-based – far more so than in other economies. We document that an … paper concludes by discussing policy solutions to Europe’s “bank bias”, which include reducing regulatory favouritism …

. A bank with higher capital has lesschance of breaching the ratio, so may actually take more risk. As a result, banks … stylized facts about pre-crisis bank behavior, and suggest implications for the optimal design of capital regulation. …

This paper examines common regulation as cause of interbank contagion. Studies based on the correlation of bank assets … that banks have a common regulator. In our model, the failure of one bank can undermine the public’s confidence in the … forbearance to the initially failing bank in the hope that it - and hence other vulnerable banks - survives. By contrast, public …

In August 2007 the United Kingdom experienced its first bank run in over 140 years. Although Northern Rock was not a … particularly large bank (it was at the time ranked 7th in terms of assets) it was nevertheless a significant retail bank and a … outside the bank as depositors rushed to withdraw their deposits. There was always a fear that this could spark a systemic run …

regulator if a financial institution fails. In this case, beliefs of bankers regarding whether an insolvent bank is liquidated … inefficiency of the bank based economy. …