The financial and economic crisis of 2007-2011 in the U.S. and Europe raises a number of fundamental questions on the role of banks in the financial system. The response so far has resulted in a reregulation of banks and certain systematically important non-bank financial institutions. One...

In this paper I compare a capital budgeting model of of bank lending based on stock valuations to a supply/demand model based on an interest rate channel for France and Germany using non-nested hypothesis tests and omitted variables tests. For France both tests indicate a strong rejection of the...

In this paper I compare a capital budgeting model of bank lending based on stock valuations to a supply/demand model based on an interest rate channel for France and Germany using non-nested hypothesis tests and omitted variables tests. For France the results of these two statistical tests...