The number of firm bankruptcies is surprisingly low in economies with poor institutions. We study a model of bank …-firm relationship and show that the bank's decision to liquidate bad firms has two opposing effects. First, the bank gets a payoff if a …

risk factors, we separate the bank-specific selection and monitoring abilities from the composition of the loan portfolio …, on average, lower loan losses, (b) the loss rate of a given industry in a bank's loan portfolio is lower if the bank has …

for riskless debt and indirectly for securitization, bank assets and leverage move together, banks become interconnected … diversification. The shadow banking system is stable and welfare improving under rational expectations, but vulnerable to crises and …

bank lending is surprisingly underexamined, given the central importance ascribed to this channel of contagion by … quarterly to the Bank of England. I find that the shock to foreign funding caused a substantial pullback in domestic lending …

. Banks maximize profits, and there are no conflicts of interest between bank shareholders and creditors. The theory explains …

The paper examines whether bank diversification in multiple dimensions can protect bank lending from uncertainty shocks … significantly alleviated by bank diversification in the loan portfolio, income, and funding aspects. Our findings offer practical … implications for regulators and banks themselves: bank diversification can effectively act as a lending shock absorber in periods …

Interest rate risk is the exposure of a bank's financial condition to adverse movements in interest rates. Changes in … interest rates affect a bank's earnings by changing its net interest income and also affect the underlying value of the bank … for assessing a bank's interest rate risk exposure: earnings perspective and economic value perspective. Changes in banks …

models in terms of correlation with actual bank losses and CDS spreads. The paper also shows how extreme measures can be used …

This paper examines the impact of banks' lending incentives on asset prices and bank cash holdings under liquidity risk … from bank loans). This paper shows fire sales of assets can be an endogenous outcome, even if banks are endowed with enough …