Banks play a central role in financing and monitoring firms in transition economies. We study how bank competition affects the efficiency of the credit allocation, the monitoring of firms, and the firms' restructuring effort. In our model, banks compete to finance an investment project with...

Are the most efficient risk-return banks more solvent than the inefficient banks? From a theoretical point of view, the answer is straightforward for non-financial firms, but it is not clear for banking firms. Likewise, if there is not a clear relationship between efficiency and solvency on the...

This study investigates whether capital structure theory can explain debt ratios in an historical environment which was characterized by poor investor protection, booming stock markets and strong banks, and in which corporate income tax did not affect capital structure. Our results, based on a...

We investigate the impact of interest rate subsidies on the total amount of borrowing and on the average cost of borrowing using data on a panel of bank-firm relationships in Italy. Our analysis reveals that subsidies are likely to reach borrowers that would have received finance even without a...

We explore the relationship between banking sector performance and the quality of regulation and supervision as measured by compliance with the Basel Core Principles for Effective Banking Supervision (BCP). Using BCP assessment results for 65 countries and 1998-2002 panel data for other...

This paper studies bank regulation in the presence of deposit insurance, where banks have private information on their own ability and their investment strategy. Banks choose the mean and variance of their portfolio return. Regulators wish to control banks' risk choice, even though all agents...

La investigaci¢n es novedosa en cuanto se ocupa de instituciones de naturaleza peculiar como las Cajas, que combinan rasgos propios de las fundaciones con los de las entidades de cr‚dito. De otro lado, se refiere a Espa¤a, pa¡s de ?civil law?, con una tradicional menor protecci¢n de los...

How do the liquidity functions of banks affect investment and growth at different stages of economic development? How do financial fragility and the costs of banking crises evolve with the level of wealth of countries? We analyze these issues using an overlapping generations growth model where...

We analyse risk-taking behaviour of banks in the context of spatial competition. Banks mobilise unsecured deposits by offering deposit rates, which they invest either in a prudent or in a gambling asset. Limited liability along with high return of a successful gamble induce moral hazard at the...

In this paper, we deal with no-arbitrage pricing problems of a chooser flexible cap (floor) written on an underlying LIBOR. The chooser flexible cap (floor) allows a right for a buyer to exercise a limited and pre-determined number of the interim period caplets (floorlets) in a multiple-period...