This paper develops a model where large financial intermediaries subject to systemic runs internalize the effect of their leverage on aggregate risk, returns and asset prices. Near steady-state, they restrict avoid risk run which gives rise an accelerator effect. For adverse shocks, system enters zone with high possibly runs. The length time remains in this depends degree concentration through ...

We analyze why national development banks (NDBs) may provide longer-term loans to firms than private commercial (PCBs). If NDB bonds have higher collateral value PCB bonds, then NDBs lend PCBs. enjoy recapitalization willingness and capacity by the state hence greater Moreover, advantages over state-owned if market liquidity. However, suffer from poor monitoring quality owing undue political in...

This paper examines the role of bank capital in monetary policy transmission India during post-global financial crisis period. Empirical results show that banks with higher capital-to-risk-weighted assets ratio (CRAR) raise funds at a lower cost. Additionally, CRAR transmit impulses smoothly, while stressed banking sector hinder transmission. Recapitalization to can improve transmission; howeve...

This paper empirically investigates whether the slowdown in the credit supply of Japanese banks during the early 1990s was caused by the deterioration of their equity capital as suggested by the capital crunch hypothesis. This hypothesis predicts that a decrease in capital will induce banks to restrict their credit supply. Panel data of the major banks shows that the banks with lower capitalras...

The most widely used e-Banking instrument in Nigeria is e-Payment, particularly the automatic teller machine (ATM) card. However, with the adoption of e-Banking by all the banks in Nigeria, the volume of cash in circulation has continued to increase pre-and-post bank recapitalization/consolidation exercise. Furthermore, some of the 25 banks that survived the exercise were found lately to have d...