governments are heavily concerned about the tax revenue losses arising from bank failures, strict capital requirements are imposed …

endogenously varies while the regulations are exogenously imposed. I propose a banking model to investigate how the changes in bank … light on how bank equity and Basel III regulations affect credit and money creation …

We study how optimal bank capital and bond risk are influenced by deposit insurance, implicit guarantees, depositor … preference, asset encumbrance, and bail-in resolution frameworks. We find that these features of bank financing change the … optimal amount of bank capital. The net effect on bond debt risk and valuation is small, while the effects on shareholder …