regulatory liquidity requirements on bank behavior. A multi-stage decision situation allows for considering the interaction … between credit risk and liquidity risk of banks. This interaction is found to make a risk neutral bank behave as if it were …

This paper evaluates the incentives that banks have to herd. It includes a complete literature review of papers from … academic papers that have examined the different causes of bank herding. The model is discussed theoretically and then … policy that reduces the costs of over-investment increases the incentives of banks to herd …

This paper investigates whether monitoring by bank lenders affects CEO incentives of borrowing firms. We find that an … increase in bank monitoring incentives significantly reduce the sensitivity of CEO wealth to stock return volatility (Vega …). The results are more profound when bank lenders are more powerful and reputable and have a prior lending relationship with …

Business cycles imply liquidity risks for banks. This paper explores how these risks influence bank lending over the … cycle. With forward-looking banks, lending cycles, credit booms and busts, or suppressed and highly fragile bank systems can … unpleasant effects on bank lending. Imposing countercyclical capital adequacy ratio may amplify procyclicality or result in …