contract their balance sheets. These bank responses generate externalities that propagate in the form of macro … macro-financial feedback loops can significantly affect macroeconomic outcomes and bank-specific stress tests results. The … heterogeneity in bank lending responses matters: it determines how each bank fares under adverse conditions and the external effects …

orientation, pressures on funding models and entity structures could affect the efficiency of capital flows through the bank …

with bank-level data to study the contagion potential of an exogenous shock via credit and funding risks. We find that …-linear function of the combination of network structures and bank-specific characteristics …

This paper identifies the mechanism through which financial crises exert long-term negative effects on output. Theory …

We develop a model of the joint capital structure decisions of banks and their borrowers. Strikingly high bank leverage … emerges naturally from the interplay between two sets of forces. First, seniority and diversification reduce bank asset … and fragility. Deposit insurance and the expectation of government bailouts increase not only bank risk taking, but also …