. 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 …

result of debt overhang, shareholders have incentives to resist reductions in leverage that make the remaining debt safer … combined value of the firm to shareholders and creditors. Moreover, debt overhang creates an addiction to leverage through a …We analyze shareholders' incentives to change the leverage of a firm that has already borrowed substantially. As a …

result of debt overhang, shareholders have incentives to resist reductions in leverage that make the remaining debt safer … combined value of the firm to shareholders and creditors. Moreover, debt overhang creates an "addiction" to leverage through a …We analyze shareholders' incentives to change the leverage of a firm that has already borrowed substantially. As a …

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 …

Traditional capital structure theory predicts that reducing banks' leverage reduces the risk and cost of equity but …

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

This paper offers a critical survey of the swings in banking regulation, notably with reference to leverage and risk … two regulatory ratios (leverage and risk weighted capital) can be complementary, but require close and constant … and adopting exclusively a leverage constraint, higher than 9%) are indicated …