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 …

the cost of credit. Public subsidies of debt financing through tax shields and implicit guarantees may make equity … “expensive” but do not make sense given the negative externalities associated with leverage. Some have suggested that debt serves …While it is recognized that the high degree of leverage used by financial institutions creates systemic risks and other …

The aim of this paper is to analyse the influence of financial system liquidity and corporate leverage on a firm …'s overinvestment. We posit that when external funds are easily available, as in expansionary monetary periods, debt loses its … traditional role as a managerial control mechanism. Instead, the supply of systemic liquidity results in corporate leverage …

. On the other hand, entering in a repo increases the future debt burden of the bank. We show, if the competitive repo …