We propose a simple model of the sovereign-bank diabolic loop, and establish four results. First, the diabolic loop can …

Bank regulators and academics have long conjectured the beneficial effects of smoothing in loan loss provisions (i ….e., making higher provisions during good times so as to avoid doing so during bad times) for bank lending and stability, while … emerging market crisis to capture an adverse supply shock to bank capital, we show, consistent with the bright-side, that …

We propose a simple model of the sovereign-bank diabolic loop, and establish four results. First, the diabolic loop can …

crises originating from coordination failures among bank creditors. The second one deals with frictions in credit and …