In 2001, government guarantees for savings banks in Germany were removed following a law suit. We use this natural …/borrower information. The results suggest that banks whose government guarantee was removed reduced credit risk by cutting off the riskiest … borrowers from credit. At the same time, the banks also increased interest rates on their remaining borrowers. The effects are …

We model the impact of bank mergers on loan competition, banks' reserve holdings and aggregate liquidity. Banks compete …

debt holders. We further find that credible limits to the safety net reduce risk taking of smaller banks with low charter …

Banks increasingly use short-term wholesale funds to supplement traditional retail deposits. Existing literature mainly … points to the "bright side" of wholesale funding: sophisticated financiers can monitor banks, disciplining bad but …, e.g., when banks hold mostly relationship-based small business loans. …