contributes to the current debate on the optimal scope of bank activities, and highlights novel channels through which …

the public, long-term systemic risk among banks tends to increase. From the dynamic perspective, bank penalties represent … long-term. In this respect, bank penalties resemble still waters that run deep. In contrast, a settlement with regulatory …

other balance sheet information. Using a sample of 95 U.S. bank holding companies from 2002 to 2011, we compare five …

to individual banks in the Merton tradition (1974) as a combination put option for the deep tail of bank losses and a … knock-in stop-loss call on bank assets. This model expresses the value of taxpayer loss exposure from a string of defaults … the face value of the debt of the entire sector. We conceive of an individual bank's systemic risk as its contribution to …

the public, long-term systemic risk among banks tends to increase. From the dynamic perspective, bank penalties represent … long-term. In this respect, bank penalties resemble still waters that run deep. In contrast, a settlement with regulatory …

range of real sectors is limited. Our results imply that regulators and supervisors should address international bank … dependencies arising from common risk factors, while recessions in real sectors due to bank defaults should be a secondary concern. …