. Key features of our model are: the development of a relation between future cash flows from fee income and the bank value …

this policy through banks. This paper examines the role of bank liquidity, capitalization and market power as internal … monetary policy change on bank performance is also considered. The empirical analysis, using large panel datasets for the … rates by disaggregating down to the individual bank level. This is achieved by the use of a Local GMM technique that also …

their interbank exposures. The micro-founded framework allows inter alia for endogenous bank defaults and bank capital … requirements. In addition, we introduce a central bank who intervenes directly in the interbank market through liquidity injections … the remaining structures show a non-negligible shock propagation mechanism. Finally, we show that central bank …

countercyclical bank markups. Markup increments during recessions directly increase borrowing costs for firms and indirectly damage … model. -- small open economy ; countercylical bank markups ; exchange rate regimes ; Bayesian estimation ; balance sheet …

address the following questions. How are macroeconomic shocks transmitted to bank risk and other banking variables? What are … the sources of bank heterogeneity, and what explains differences in individual banks’ responses to macroeconomic shocks …? Our paper has two main findings: (i) Average bank risk declines, and average bank lending increases following expansionary …