highlight an opposite effect: higher profitability loosens bank borrowing constraints. This enables profitable banks to take … risk on a larger scale, inducing risk-taking. This effect is more pronounced when bank leverage constraints are looser, or …

Traditional theory suggests that high franchise value limits bank risk-taking incentives. Then why did many banks with … funding (such as repos), and when it can achieve high leverage thanks to better institutional environment (with more …

individual asset holding data of German banks. I find that those banks operating with tight regulatory constraints pick the … selection allows banks to increase the return on the capital required for an ABS investment by a factor of four. …

individual asset holding data of German banks. I find that those banks operating with tight regulatory constraints pick the … selection allows banks to increase the return on the capital required for an ABS investment by a factor of four. …

yield. Studying securitization exposures on the balance sheets of German banks, I show evidence consistent with this … prediction. Banks with tight regulatory constraints (low capital adequacy ratios) invest more in higher yielding ABSs … conditionally on rating-implied regulatory risk weights. ABS investments of constrained banks tend to perform worse ex post in terms …

of leverage which gives rise to systemic risk. We suggest the aggregated leverage ratio named “Global Aggregated Leverage … Ratio” (GALR), which encompasses the activity of commercial and investment banks. We test this indicator through logit …

future crises. The crisis is was the product of a ‘perfect storm’ bringing together a number of microeconomic and … agencies’ business model, the procyclical behaviour of leverage in much of the financial system and of the Basel capital … global liquidity creation by key central banks and, second, an ex-ante global saving glut, brought about by the entry of a …

We study the effects of a bank’s engagement in trading. Traditional banking is relationship-based: not scalable, long … leads trading in banks to become increasingly risky, so that problems in managing and regulating trading in banks will …

We model the expected support of banks with credit ratings from Moody's and Fitch, taking explicitly into account the ….e., that the expected support may induce banks to assume bigger risks). Our results suggest that moral hazard concerns are …'s institutions. These findings have important implications for the dynamics of banking crises, the value of the ‘fair’ insurance …