loan scale. A financial crisis, simulated as an abrupt decline in the collateral value of bank assets, triggers a flight to …

to determine whether the bank run is best explained by a self-fulfilling prophecy theory or if fundamentals matter. We … favor of the solvency theory …

This article explores the implications of borrower’s side collateral constraints on the real economy. The novel element …, as collateral constrained. I find three main results. First, collateral requirements were highly volatile during the … period 2007–2012. Second, the effect of an increase in collateral requirements is highly significant. Third, the model …