In this paper, we develop a contingent claim model to evaluate a bank’s equity and liabilities that integrates the … regulation. The barrier options theory of corporate security valuation is applied to the contingent claims of a bank. The barrier … products (WMPs) and entrusted loans (ELs). The optimal bank interest margin, i.e., the spread between the loan rate and the …

rates in China. Using hand-collected data we find WMP yields are positively associated with lending rates whereas the effect … of WMP scale varies across bank size. For the big-5 state-owned banks, the negative “transfer-effect” of high-risk high …-yield loans into shadow bank credit dominates the positive “funding-cost-effect” of banks becoming more dependent on wholesale …

of the less regulated, so-called shadow banking sector. Employing flow-of-funds data for the Euro Area's non-bank banking … increase in non-bank banking). Overall intermediation activity, hence, has remained roughly at the same level. Moreover, our … findings also suggest that non-bank banks have tended to take positions in riskier assets (particularly in equities). In line …