We analyze the impact minimal capital and reserve requirements have on bank failures arising from solvency and liquidity shortages in a banking system where banks are characterized by the amount of capital, cash reserves and their exposure to the interbank loan market as borrowers as well as...

We model a stylized banking system where banks are characterized by the amount of capital, cash reserves and their exposure to the interbank loan market as borrowers as well as lenders. A network of interbank lending is established that is used as a transmission mechanism for the failure of...

This paper proposes a real options model of mergers and acquisitions motivated by synergies between two companies. We investigate the minimum synergies required to conduct the merger and how the balance between cash and shares as media of exchange affect this outcome. Based on this analysis we...