competition would have increased welfare by 1.02%, but at the cost of increasing the probability of bank default from 0.02% to 0 ….44%. We show that bank profits are increasing in the policy rate, in particular when interest rates are low. Finally, we find …

. Further, we show that bank profits are increasing in the policy rate, and that the policy rate was set optimally to minimize … the probability of bank default …

range of real sectors is limited. Our results imply that regulators and supervisors should address international bank … dependencies arising from common risk factors, while recessions in real sectors due to bank defaults should be a secondary concern. …

This study investigates the implications of cross-country differences in banking regulation and supervision for the … international subsidiary locations and risk of U.S. bank holding companies (BHCs). We find that U.S. BHCs are more likely to operate … subsidiaries in countries with weaker regulation and supervision and that such location decisions are associated with elevated BHC …