The article shows that time-consistent, imperfectly targeted support to distressed institutions
makes private leverage choices strategic complements. When everyone engages in maturity …

Systemic risk is modeled as the endogenously chosen correlation of returns on assets held
by banks. The limited liability of banks and the presence of a negative externality of one …

While the too-big-to-fail guarantee is explicitly a part of bank regulation in many countries,
this paper shows that bank closure policies also suffer from an implicit “too-many-to-fail” …

The potential failure of a large bank presents vexing questions for policymakers. It poses
significant risks to other financial institutions, to the financial system as a whole, and possibly …

As the number of bank failures increases, the set of assets available for acquisition by
surviving banks enlarges but the total liquidity available with surviving banks falls. This …

Commercial banks are among the oldest and most familiar financial institutions. When they
work well, we hardly notice; when they do not, we rail against them. What are the historical …

The merit of international convergence of bank capital requirements in the presence of
divergent closure policies of different central banks is examined. The lack of a …

This paper analyzes the relationship between bank lobbying and supervisory decisions of
regulators and documents its moral hazard implications. Exploiting bank-level information …

Banks attitude towards speculative lending is typically regarded as the result of trading-off
the short-term gains from risk-taking against the risk of loss of charter value. We study the …

We investigate how government interventions such as blanket guarantees, liquidity support,
recapitalizations, and nationalizations affect banking competition. These issues are critical …