I analyze the impact of raising capital requirements on the quantity, composition, and riskiness of aggregate investment in a model in which firms borrow from both bank and non-bank lenders. The bank funds loans with insured deposits and costly equity, monitors borrowers, and must maintain a...

We study how banks' exposure to a sovereign crisis gets transmitted onto the corporate sector. To do so we use data on the universe of banks and firms in Argentina during the crisis of 2001. We build a model characterized by matching frictions in which firms establish (long-term) relationships...

This paper empirically investigates the difference between Islamic and conventional banks in terms of business dynamics, cost structure, credit quality, and stability. It also examines the difference in the response of two types of banks during peak and trough phases of the business cycle. The...

The purpose of this paper is to investigate whether credit and liquidity risks individually and/or jointly impact bank stability in the context of the dual banking system in the MENA region, and to check whether Islamic banks have different patterns in terms of the effect of the two risk...

This paper studies the impact of local unemployment shocks on bank profitability. Our work advances on previous studies that only use national or state level data, as we create bank-specific measures of local unemployment in which the bank has exposure. Using these novel measures, we can...

In light of the current debate about the link between accounting and financial stability, we investigate the determinants of procyclical book leverage for US commercial and savings banks. We find that total asset growth and GDP growth are both positively related to book leverage growth. Our...