. Policies that subsidize debt and indirectly penalize equity through taxes and implicit guarantees are distortive. And while … debtś informational insensitivity may provide valuable liquidity, increased capital (and reduced leverage) can enhance this … benefit. Finally, suggestions that high leverage serves a necessary disciplining role are based on inadequate theory lacking …

because it reflects special liquidity benefits of bank debt. Even aside from neglecting the systemic damage to the economy …

it reflects special liquidity benefits of bank debt. Even aside from neglecting the systemic damage to the economy that …

capital to a market based leverage ratio of 3%, EUR 84 billion of extra capital would be needed for the largest 60 banks. At … the bank level, the top tertile of well-capitalised banks (with a market based leverage ratio well above 4%) continues …

We develop a model of the joint capital structure decisions of banks and their borrowers. Strikingly high bank leverage … take on high leverage safely; supply chain effects compel them to do so. Firms with low leverage also arise naturally, as … framework underlie our model, we can quantify the impact capital regulation and other government interventions have on leverage …

banks' leverage: banks close to the regulatory constraints do not change their leverage when tax rates change. This holds … true for both tax cuts and tax hikes. Among less constrained entities, the leverage of smaller banks is more responsive to … regional variations in the rate of the Italian tax on productive activities (IRAP) using administrative, confidential data on …

We examine the nature of impact of national culture on bank leverage using a broad sample of 1,701 banks from 79 … individualism culture dimensions hold more leverage while, banks in countries with high uncertainty-avoidance, power distance, and … long-term orientation have less leverage. Notably, bank size substantially moderates these cultural effects. Our findings …

normative view that banks should maintain high leverage over time …

model" problem, and policy answers such as leverage ratios and more reliance on backtesting mechanisms …