European banks are exposed to a substantial amount of risky sovereign debt. The “missing bank capital” resulting from … the zero-risk weight exemption for European banks for European sovereign debt amplifies the co-movement between sovereign … consider the trade-off of benefits of sovereign debt (for banks and sovereigns) and spillover risk when applying risk …

We develop a model of bank risk-taking with strategic sovereign default risk. Domestic banks invest in real projects … government's incentives to repay and therefore lowers its borrowing costs. For low levels of government debt, banks influence … default are perfectly correlated. Banks fail to account for how their bond purchases influence the government's default …

We develop a model of bank risk-taking with strategic sovereign default risk. Domestic banks invest in real projects … government's incentives to repay and therefore lowers its borrowing costs. For low levels of government debt, banks influence … default are perfectly correlated. Banks fail to account for how their bond purchases influence the government's default …

I propose a dynamic general equilibrium model in which strategic interactions between banks and depositors may lead to … endogenous bank fragility and slow recovery from crises. When banks' investment decisions are not contractible, depositors form … complementarities and possibly multiple equilibria: in response to an increase in funding costs, banks may optimally choose to pursue …

international transmission of financial shocks. We use data on individual loans by the largest international banks to their various … countries of operation to examine whether banks' access to borrower information affected the transmission of the financial shock … to control for general bank characteristics. We find that during the crisis banks continued to lend more to countries …

risks of financial globalization. We use loan-level data on lending by the largest international banks to their various … countries of operation to examine how banks reduced cross-border credit after the collapse of Lehman Brothers. Country-, firm … traits of banks as well as the countries and firms they lend to. We document substantial heterogeneity in the extent to which …