Interest income is the most important source of revenue for most of the banks. The aim of this paper is to assess the impact of di erent interest rate scenarios on the banks' interest income. As we do not know the interest rate sensitivity of real banks, we construct for each bank a portfolio with a similar composition of its assets and liabilities, called 'tracking bank'. We evaluate the e ect...

This paper examines the corporate governance of banks. When banks efficiently mobilize and allocate funds, this lowers the cost of capital to firms, boosts capital formation, and stimulates productivity growth. Thus, weak governance of banks reverberates throughout the economy with negative ramifications for economic development. After reviewing the major governance concepts for corporations in...

This paper argues that banks must be sufficiently levered to have first-best incentives to make new risky loans. This result, which is at odds with the notion that leverage invariably leads to excessive risk taking, derives from two key premises that focus squarely on the role of banks as informed lenders. First, banks finance projects that they do not own, which implies that they cannot extrac...

Abstract – This paper introduces two-channel FIR filter banks synthesized using the frequencyresponse masking approach. The proposed filter banks have a lower computational complexity compared with conventional filter banks, especially when the individual filters have narrow transition bands. One price to pay is a somewhat increased overall delay. A design example is included illustrating the e...

This paper seeks to examine the competitive behavior of the Brazilian banking industry by conducting an analysis at the level of individual banks to gain an understanding of how the risk-taking behaviors of banks are affected by their degree of market power. Our results suggest that the Brazilian banking industry is characterized by monopolistic competition. Our foremost finding is that the mar...

This paper identi…es a cost of stress test disclosure that stems from the facilitating role that stress test information can potentially play in coordinating banks into taking excessive risk. We examine a model of risk taking by banks, the concurrent failure of which may induce a bailout decision by a regulator if the number of failing banks is large enough. We …nd a “if ain’t broken don’t …x i...