Banking

The Political Economy of Bank- and Market Dominance

Caught between Scylla and Charybdis? Regulating Bank Leverage When There is Rent Seeking and Risk Shifting

We develop a theory of optimal bank leverage in which the benefit of debt in inducing loan monitoring is balanced against the benefit of equity in...

Incentive Pay and Systemic Risk

We show that, in the presence of correlated investment opportunities across firms, risk sharing between firm shareholders and firm managers leads to...

Money Market Funds Run Risk: Will Floating Net Asset Value Fix the Problem?

The Effect of Creditor Rights on Bank Monitoring, Capital Structure and Risk-taking

We examine the multi-faceted effect of creditor rights on the way banks monitor, operate and finance themselves. We present a simple analytical model...

Post-Crisis Corporate Culture and Governance in Banking

This paper provides a brief assessment of how ethics, culture and corporate governance have evolved in banking since the financial crisis. It concludes...

Unbundling Banking, Money, and Payments

For centuries, our systems of banking, money, and payments have been legally and institutionally intertwined.  The fact that these...

Securitization, Covered Bonds and the Risk Taking Behavior of European Banks

This study investigates the impact of securitization and the issuance of covered bonds on the credit risk taking behavior of banks. We collected data for...

Host's Dilemma: Rethinking EU Banking Regulation in Light of the Global Crisis

Lehman Brothers: Did Markets Know?

On September 15, 2008, Lehman Brothers Inc. announced their filing for bankruptcy. This announcement did take markets by surprise causing widespread...

The Flight Home Effect: Evidence from the Syndicated Loan Market During Financial Crises

In the context of the global market for syndicated bank loans, we provide evidence that the collapse of international markets during financial crises...

Uncertainty and the Financial Crisis