bank market values hardly respond to changes in the default risk of individual systemic banks. Together, however, changes …

This paper develops a model to analyze two different bad bank schemes, an outright sale of toxic assets to a state …-owned bad bank and a repurchase agreement between the bad bank and the initial bank. For both schemes, we derive a critical … transfer payment that induces a bank manager to participate. Participation improves the bank's solvency and enables the bank to …

lead to excessive risk-taking. We examine the relation between deposit insurance and bank risk and systemic fragility in … the years leading up to and during the recent financial crisis. We find that generous financial safety nets increase bank … risk and systemic fragility in the years leading up to the global financial crisis. However, during the crisis, bank risk …

We assess the ability of bank resolution frameworks to deal with systemic banking fragility. Using a novel and detailed … database on bank resolution regimes in 22 member countries of the Financial Stability Board, we show that systemic risk, as … measured by Delta CoVaR, increases more for banks in countries with more comprehensive bank resolution frameworks after …

bank is generally beneficial for hedge funds in that it lowers the rate of fund failure. However, this benefit becomes …

facilitated bank participation in the markets for mortgage-backed securities. The essay then explains how securitization failed to … often overlooked danger of bank investments in real estate: the cyclicality of real estate losses. The essay analyzes the …, including research on bank leverage cycles.The essay next provides a very high level outline of various approaches to decoupling …

“Too big to fail” traditionally refers to a bank that is perceived to generate unacceptable risk to the banking system … and indirectly to the economy as a whole if it were to default and unable to fulfill its obligations. Such a bank … of contagion if a bank fails. The main objectives in this paper are to identify the different dimensions of “too big to …