We analyze the relationship between bank size and risk-taking under the New Basel Capital Accord. Using a model with … imperfect competition and moral hazard, we show that the introduction of an internal ratings based (IRB) approach improves upon … a competitive advantage and, due to fiercer competition, pushes smaller banks to take higher risks. This may even lead …

conditions, credit default and bank capitalization for the transmission of macroeconomic shocks. We fit the model to euro area … empirical literature, i.e. the pro-cyclicality of bank profitability and the counter-cyclical response of firm default rates and …

We study the impact of higher bank capital buffers, namely of the Other Systemically Important Institutions (O …

conditions, credit default and bank capitalization for the transmission of macroeconomic shocks. We fit the model to euro area … empirical literature, i.e. the pro-cyclicality of bank profitability and the counter-cyclical response of firm default rates and …

We study the impact of higher bank capital buffers, namely of the Other Systemically Important Institu- tions (O …

, we show that the economic impact of changes in bank capital requirements depends on the state of the macro …, the impact on bank loan supply works through a ”pricing channel” which is small: around 0.1% less loans for a 1pp increase …

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 …