0000000000846702
AUTHOR
Andreas Barth
Why banks are not too big to fail - evidence from the CDS market
This paper argues that bank size is not a satisfactory measure of systemic risk because it neglects aspects such as interconnectedness, correlation, and the economic context. In order to differentiate the effect of bank size from that of systemic importance, we control for systemic risk using the CoVaR measure introduced by Adrian and Brunnermeier (2011). We show that a bank's contribution to systemic risk has a significant negative effect on banks’ credit default swap (CDS) spreads, supporting the too‐systemic‐to‐fail hypothesis. Once we control for systemic risk, bank size (relative to gross domestic product (GDP)) has either no or a positive effect on banks’ CDS spreads. The effect of ba…
Capital Regulation with Heterogeneous Banks
We provide a general equilibrium analysis of potential consequences from the introduction of a binding leverage ratio, as proposed in Basel III. If banks differ in their monitoring skills and their ability to successfully complete a risky investment project, a tighter leverage ratio does not only mitigate moral hazard arising from limited liability, but also carries an unintended consequence: Banks are not allowed to absorb the entire supply of debt if they cannot raise new equity, which induces agents with a lower monitoring skill to open a bank. This decreases the average ability of operating banks. We further show that rising heterogeneity in the banking sector increases this negative ef…
Tracking Ca2+ ATPase intermediates in real time by x-ray solution scattering
Sarco/endoplasmic reticulum Ca2+ ATPase (SERCA) transporters regulate calcium signaling by active calcium ion reuptake to internal stores. Structural transitions associated with transport have been characterized by x-ray crystallography, but critical intermediates involved in the accessibility switch across the membrane are missing. We combined time-resolved x-ray solution scattering (TR-XSS) experiments and molecular dynamics (MD) simulations for real-time tracking of concerted SERCA reaction cycle dynamics in the native membrane. The equilibrium [Ca2] E1 state before laser activation differed in the domain arrangement compared with crystal structures, and following laser-induced release o…