1) A Note on Regulatory Arbitrage: Bank Risk, Capital Risk, Interest Rate Risk and ALM in European Banking; Magnus Willesson -- 2) Basel III, Liquidity Risk and Regulatory Arbitrage -- 3) OTC Derivatives and Counterparty Credit Risk Mitigation: The OIS Discounting Framework; Paola Leona, Massimo Proietti, Pasqualina Porretta and Gianfranco Vento -- 4) Diversification and Connections in Banking: First Findings; Claudio Zara and Luca Cerrato -- 5) Banking System and Financial Exclusion: Towards a More Comprehensive Approach; Marta de la Cuesta González, Cristina Ruza y Paz-Curbera and Beatriz Fernández Olit -- 6) Small and Medium-Sized Banks in Central and Eastern European Countries; Katarzyna Mikołajczyk -- 7) Stock Returns and Bank Ratings in the PIIGS; Carlos Salvador Muñoz -- 8) Value Creation Drivers in European Banks: Does the Capital Structure Matter?; Josanco Floreani, Maurizio Polato, Andrea Paltrinieri and Flavio Pichler -- 9) Liquidity Mismatch, Bank Borrowing Decision and Distress: Empirical Evidence From the Italian Credit Co-Operative Banks; Gianfranco Vento, Andrea Pezzotta and Stefano Di Colli.