extensions by introducing new bank and country-level variables. We find robust evidence that investment in government securities … and market openness positively affect bank intermediation costs while the trilemma index negatively affects them. During … the world financial crisis, bank intermediation costs increased. Moreover, we observe that cost inefficiency, credit risk …

Loan guarantees represent a form of government intervention to support bank lending. However, their use raises concerns … as to their effect on bank risk-taking incentives. In a model of financial fragility that incorporates bank capital and a … bank incentive problem, we show that loan guarantees reduce depositor runs and improve bank underwriting standards, except …