until the introduction of the Troubled Asset Relief Programme (TARP) (late 2007–2008). This effect is attributed to bank … TARP period (2009–2011), there is no default risk effect on equity prices. PCA and TARP have altered the default risk … prevail over the periods prior to the enactment of Prompt Corrective Action (PCA) (1984–1992) and from the start of the crisis …

introduction of PCA in 1992 and TARP in 2008 constitute significant regulatory regime changes, and provide the necessary framework …This paper investigates the relation between bank dividends and bank risk over the period 1984–2011, and assesses the … risk-taking over the post-PCA regime spanning the period 1992–2008. We interpret this evidence as indication of …

Prompt Corrective Action (PCA) on default risk is of practical relevance. We provide strong evidence that both the dynamic … and the contemporaneous impact of the PCA-defined tier 1 risk-based capital ratio and the tier 1 leverage ratio on default … risk is reduced following PCA’s introduction. We interpret this as evidence that PCA is effective in managing the default …

. This paper models non-linear dynamics in banking. Small shocks can lead from an equilibrium with few bank defaults straight … hazard in bank monitoring. Our results imply trade-offs between regulators' microprudential desire to shield individual weak … banks and the macroprudential consequences of doing so. Moreover, limiting bank reliance on wholesale funding always reduces …

lower credit risk than conventional banks. In terms of insolvency risk, small Islamic banks also appear more stable …