the United States as well as in other countries,and to explore the implications of this decline and banks’responses to it … for financial stability and regulatory policy.A key policy issue is whether the decline of bankingthreatens to make the … incentivesof bank managers toward assuming greater risk inan effort to maintain former profit levels. For example,banks might make …

value and aggregate economic activity. We investigate whether and how bank governance, especially private vs. non …-private bank ownership, affects financial constraints of small and medium-sized enterprises (SMEs). We focus on SMEs because they … are more opaque, bank-dependent and riskier than large firms. Given the significant differences between private and non …