The European Commission's current initiative to commence consultations on the action plan to build a Capital Markets Union is to be welcomed. The objective must be to create a stable and sustainable financial system, providing all households and companies with appropriate access to financial...

Banks play a role in the corporate governance of firms as well as acting as debt financiers around the world. Universal banks can have control over borrowing firms by representation on the board of directors or by holding shares through direct stakes or institutional holdings. We investigate the...

We draw on stylized facts from the finance literature to build a model where altering the relative costs of bank and bond financing changes the entire distribution of firm size, with implications for the aggregate capital stock, output, and welfare.