... on investing islands are financially constrained, banks on non-investing islands may or may not be Roughly speaking, if the constraint on inter-bank borrowing binds tightly, banks in non-investing ... funds to banks in investing region For reasonable variations of our calibration, banks remain unconstraint in non-investing regions and remain constrained in investing regions Finally, we suppose ... hits In addition, banks on investing islands have higher leverage than those on non-investing islands because the asset price is lower in investing islands Accordingly, asset prices in investing...