on systemic risk. Banks choose their portfolio, including their borrowing and lending decisions on the interbank market …, to maximize profit subject to regulatory constraints in an asset-liability framework. Systemic risk arises in the form of … detrimental effects of higher risk taking incentives.We find that central bank supply of liquidity quite generally increases …

network statistics of the Dutch interbank market from mid-February 2008 through April 2011. We find that credit-risk … presence of relationship lending. Shocks to credit-risk uncertainty lead to extended periods of low market activity …