TY  - GEN
AB  - This paper studies the question to what extent premia for macroeconomic risks in banking are sufficient to avoid banking crises. We investigate a competitive banking system embedded in an overlapping generation model subject to repeated macroeconomic shocks. We show that even if banks fully incorporate macroeconomic risks in their pricing of loans, a banking system may enter bankruptcy with a probability of one. A major cause for this default is that risk premia of a competitive banking system may become too small if the capital base is low.
DA  - 2004
KW  - Risk premia
KW  - Banking crises
KW  - Financial intermediation
KW  - Macroeconomic risks
KW  - Banking regulation
LA  - eng
PY  - 2004
TI  - Do risk premia protect from banking crises?
UR  - https://nbn-resolving.org/urn:nbn:de:hbz:361-5617
Y2  - 2024-11-22T11:12:55
ER  -