During financial crises, market participants are pressurized and presumably prone to emotional biased decisions. We use the Economic Policy Uncertainty Indicator and Dow Jones Industrial Average as well as Nikkei 225 GARCH volatilities to test for ambiguity aversion and selective perception of...

The liquidity regulation of banks in Pillar 1 of the Basel framework does not consider funding cost risks of different bank business models. Therefore, we assemble a data set of balance sheet positions including maturities and use the method of Value-Liquidity-at-Risk to explore 118 European...

Bank business models show diverse risk characteristics, but these differences are not sufficiently considered in Pillar 1 of the regulatory framework. Even if the business model is analyzed within the European SREP, global Pillar 2 approaches differ and could lead to competitive disadvantages....

An increasing string of literature focuses on bank business models because they can be seen as "an additional indicator of emerging risks" (Grossmann and Scholz, 2017, p. 1). Therefore, the following paper gives an overview of the current state of research and ends with a proposal for a more...

Higher capital requirements of Basel III are criticized for increasing the cost of capital for banks. Against this backdrop, Admati et al. (2013) argue that higher equity ratios are not expensive because the required return on equity will decrease. Previous studies have empirically tested this...

The development of the Basel III leverage ratio does not consider the different risk characteristics of bank business models. All banks have to achieve the same requirements even if a high-risk business model is chosen. For that reason, leverage ratios which are adjusted to the risk-profile of...