the LRR is no longer the binding capital constraint on them. If the LRR is lower than the average bank's IRB requirement …

We develop a theory of bank liquidity (cash reserve) requirements. Because cash is both observable and riskless …, greater cash holdings improve bank incentives to manage risk in the remaining, non-cash portfolio of risky assets. In a model … with a single bank, cash is held voluntarily to stem depositors' incentives to withdraw funds early in response to adverse …

Consider a competitive bank whose illiquid asset portfolio is funded by short-term debt that has to be refinanced … of social externalities of bank failures further lowers the optimal level of transparency. Moreover, asset risk taking …

arbitrage. I develop a framework to study bank regulation with strategic selection of risk models. A bank supervisor can …

constrain high risk bank investment without simultaneously reducing overall investment volume. However, if collusion between the …This paper models the strategic interaction between a rating agency, a bank and a bank regulator who lacks information … about bank asset risk. The regulator can either (1) make bank capital requirements contingent on credit ratings; or (2) set …

Bank capital requirements are based on a mix of market values and book values. We investigate the effects of a policy … banking organizations. Our analysis is based on security-level data on individual bank portfolios matched to bond …

conduct investigations in the search of qualified loan borrowers. The model assumes that the domestic bank has a cost … advantage in evaluating a borrower’s credit quality compared to the competing foreign bank. Despite the cost heterogeneity, an … equilibrium exists in which two such banks coexist in the market. Specifically, the information cost advantaged bank orchestrates …