by curbing risk-taking incentives, the higher the leverage the bank is permitted to take on. Consequently, the risk …

because it reflects special liquidity benefits of bank debt. Even aside from neglecting the systemic damage to the economy …

it reflects special liquidity benefits of bank debt. Even aside from neglecting the systemic damage to the economy that …

Regulation and subsequent deregulation significantly affect firms' debt decisions. Prior to deregulation, regulated … firms depend significantly more on long-term and public debt but reduce this dependence considerably during deregulation …. Cross-sectional analysis shows that the reduction in the use of long-term and public debt results from changing firm …

result of debt overhang, shareholders have incentives to resist reductions in leverage that make the remaining debt safer … combined value of the firm to shareholders and creditors. Moreover, debt overhang creates an addiction to leverage through a …We analyze shareholders' incentives to change the leverage of a firm that has already borrowed substantially. As a …

perquisites that yield private benefits). The privately optimal level of bank leverage is neither too low nor too high: It … balances efficiently the market discipline imposed by owners of risky debt on managerial rent seeking against the asset … substitution induced at high levels of leverage. However, when correlated bank failures can impose significant social costs …

result of debt overhang, shareholders have incentives to resist reductions in leverage that make the remaining debt safer … combined value of the firm to shareholders and creditors. Moreover, debt overhang creates an "addiction" to leverage through a …We analyze shareholders' incentives to change the leverage of a firm that has already borrowed substantially. As a …

We develop a model of the joint capital structure decisions of banks and their borrowers. Strikingly high bank leverage … take on high leverage safely; supply chain effects compel them to do so. Firms with low leverage also arise naturally, as … framework underlie our model, we can quantify the impact capital regulation and other government interventions have on leverage …