This paper reviews the theoretical literature on bank capital regulation and analyzes some of
the approaches to redesigning the 1988 Basel Accord on capital standards. The paper starts …

The second edition of an essential text on the microeconomic foundations of banking
surveys the latest research in banking theory, with new material that covers recent …

We investigate the link between firm size and risk-taking among financial institutions during
the period of 2002 to 2012 and find size is positively correlated with risk-taking measures …

This article develops a general methodology that uses the observed prices of a derivative
contract to compute maximum likelihood parameter estimates for an unobserved asset value …

Using responses to a well‐known confidential survey, we study corporations' use of
derivatives to “take a view” on interest rate and currency movements. Characteristics of …

Unless priced and administered appropriately, a governmental safety net enhances risk‐
shifting opportunities for banks. This paper quantifies regulatory efforts to use capital …

The widespread issuing of below-investment-grade bonds to restructure firms and finance
management buyouts and hostile takeovers surely ranks as a major innovation in terms of …

We analyze the effect of deposit insurance on the risk-taking behavior of banks in the context
of a quasi-natural experiment using detailed credit registry data. Using the case of an …

Financial guarantees, such as insurance against credit risk and contract default, serve an
important function for virtually every player in the global economy--households, businesses …

Risk-shifting occurs when creditors or guarantors are exposed to loss without receiving
adequate compensation. This paper seeks to measure and compare how well authorities in …