Bank Funding Structures and Risk: Evidence from the Global Financial Crisis

  title={Bank Funding Structures and Risk: Evidence from the Global Financial Crisis},
  author={Francisco V{\'a}zquez and Pablo Mariano Federico},
  journal={ERN: Regulation of Financial Markets (Topic)},
This paper analyzes the evolution of bank funding structures in the run up to the global financial crisis and studies the implications for financial stability, exploiting a bank-level dataset that covers about 11,000 banks in the U.S. and Europe during 2001–09. The results show that banks with weaker structural liquidity and higher leverage in the pre-crisis period were more likely to fail afterward. The likelihood of bank failure also increases with bank risk-taking. In the cross-section, the… Expand
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