Population genetic structure and dispersal in white-lipped peccaries (Tayassu pecari) from the Brazilian Pantanal

In many mammals social organization promotes genetic structuring, which can be influenced by the dispersal pattern of the species. We analyzed the population genetic structure and dispersal of white-lipped peccaries (Tayassu pecan) from the Pantanal, Brazil. We genotyped 100 individuals at 7 microsatellite loci from 2 adjacent locations with no obvious geographic barrier between them. We found a significant but low F(ST) value, and the Bayesian analysis indicated a unique cluster. No significant differences were observed between mean assignment indices of resident males and females from both locations, and the probability of being born at the location sampled of > 30% of the individuals analyzed was lower than average. Mean relatedness between resident female, male, and opposite-sex pairs was not statistically different in both locations. These results suggest a low degree of genetic differentiation between the locations analyzed, and dispersal by both sexes (contrary to the predicted male-biased dispersal of most mammalian species).

Percolation in a network with long-range connections: Implications for cytoskeletal structure and function

Cell shape, signaling, and integrity depend on cytoskeletal organization. In this study we describe the cytoskeleton as a simple network of filamentary proteins (links) anchored by complex protein structures (nodes). The structure of this network is regulated by a distance-dependent probability of link formation as P = p/d(s), where p regulates the network density and s controls how fast the probability for link formation decays with node distance (d). It was previously shown that the regulation of the link lengths is crucial for the mechanical behavior of the cells. Here we examined the ability of the two-dimensional network to percolate (i.e. to have end-to-end connectivity), and found that the percolation threshold depends strongly on s. The system undergoes a transition around s = 2. The percolation threshold of networks with s < 2 decreases with increasing system size L, while the percolation threshold for networks with s > 2 converges to a finite value. We speculate that s < 2 may represent a condition in which cells can accommodate deformation while still preserving their mechanical integrity. Additionally, we measured the length distribution of F-actin filaments from publicly available images of a variety of cell types. In agreement with model predictions, cells originating from more deformable tissues show longer F-actin cytoskeletal filaments. (C) 2008 Elsevier B.V. All rights reserved.

Assessing Dodd Frank Effects on banking capital structure and Banker´s Pay structure

The systemic financial crisis that started in 2008 in the United States had some severe effects in the economic activity and required the bailout of financial institutions with the use of taxpayer’s money. It also originated claims for stronger regulatory framework in order to avoid another threat in the financial market. The Dodd Frank Act was proposed and approved in the United States in the aftermath of the crisis and brought, among many other features, the creation of the Financial Stability Oversight Council and the tougher inspection of financial institutions with asset above 50 billion dollars. The objective of this work is to study the causal effect of the Dodd Frank Act on the behavior of the treatment group subject to monitoring by the Financial Stability Oversight Council (financial institutions with assets above 50 billion dollars) regarding capital and compensation structure in comparison to the group that was not treated. We use data from Compustat and our empirical strategy is the Regression Discontinuity Design, not usually applied to the banking literature, but very useful for the present work since it allows us to compare the treatment group and the non-treatment group in the year of the enactment of the law (2010). No change of behavior was observed for the Capital Structure. In the Compensation Schemes, however, a decrease was found in the item other compensation for CEOs and CFOs. We also performed a robustness check by running a placebo test on the variables in the year before the law was enacted. No significance was found, which supports the conclusion that our main results were caused by the enactment of the DFA.

Structure and catalytic mechanism of glucosamine 6-phosphate deaminase from Escherichia coli at 2.1 Å resolution

Background: Glucosamine 6-phosphate deaminase from Escherichia coli is an allosteric hexameric enzyme which catalyzes the reversible conversion of D-glucosamine 6-phosphate into D-fructose 6-phosphate and ammonium ion and is activated by N-acetyl-D-glucosamine 6-phosphate. Mechanistically, it belongs to the group of aldose-ketose isomerases, but its reaction also accomplishes a simultaneous amination/deamination. The determination of the structure of this protein provides fundamental knowledge for understanding its mode of action and the nature of allosteric conformational changes that regulate its function. Results: The crystal structure of glucosamine 6-phosphate deaminase with bound phosphate ions is presented at 2.1 Å resolution together with the refined structures of the enzyme in complexes with its allosteric activator and with a competitive inhibitor. The protein fold can be described as a modified NAD-binding domain. Conclusions: From the similarities between the three presented structures, it is concluded that these represent the enzymatically active R state conformer. A mechanism for the deaminase reaction is proposed. It comprises steps to open the pyranose ring of the substrate and a sequence of general base-catalyzed reactions to bring about isomerization and deamination, with Asp72 playing a key role as a proton exchanger.

Revisiting AFLP fingerprinting for an unbiased assessment of genetic structure and differentiation of taurine and zebu cattle

Fundação de Amparo à Pesquisa do Estado de São Paulo (FAPESP)

Phylogeographic Structure and Karyotypic Diversity of the Brazilian Shrew Mouse (Blarinomys breviceps, Sigmodontinae) in the Atlantic Forest

Blarinomys breviceps possesses cryptic and burrowing habits with poorly documented genetics and life history traits. Due to its rarity, only a few specimens and DNA sequences have been deposited in collections worldwide. Here, we present the most comprehensive cytogenetic and molecular characterization of this rare genus. Phylogenetic analyses based on partial cytochrome b sequences were performed, attempting to establish the relationships among individuals with distinct karyotypes along the geographic distribution of the genus in the Atlantic Forest. Classical and molecular cytogenetics, using banding patterns and FISH of telomeric and whole chromosome X-specific painting probes (obtained from the Akodontini Akodon cursor) were used to characterize and compare the chromosomal complements. Molecular phylogenetic analyses recovered 2 main geographically structured clades, northeastern and southeastern with pair-wise sequence divergences among specimens varying between 4.9 and 8.4%. Eight distinct karyomorphs are described: (A) 2n = 52 (50A, XX), (B) 2n = 52 (48A, XY+2Bs), (C) 2n = 45 (42A, XY+1B), (D) 2n = 43 (37A, XX+4Bs), (E) 2n = 37 (34A, XY+1B), (F) 2n = 34 (32A, XX), (G) 2n = 31 (27A, XX+2Bs), (H) 2n = 28 (26A, XY), all with the same number of autosomal arms (FNA = 50). Variation of 0-4 supernumerary chromosomes (Bs) presenting heterogeneity in morphology and distribution of interstitial telomeric sequences (ITSs) is reported. ITSs are also found in some metacentric autosomes. The phylogeographic separation between 2 major lineages with high levels of genetic divergence, and the wide karyotypic diversity indicate that B. breviceps is a diverse group that warrants taxonomic re-evaluation. Copyright (C) 2012 S. Karger AG, Basel

Innate Immunity in Insects, Function and Regulation of Hemolin from Hyalophora cecropia

Insects are useful models for the study of innate immune reactions and development. The distinction between recognition mechanisms preceding the breakdown of apoptotic cells during metamorphosis, and the breakdown of cells in response to infections, is unclear. Hemolin, a Lepidopteran member of the immunoglobulin superfamily, is a candidate molecule in self/nonself recognition. This thesis investigates hemolin function and hemolin gene regulation at a molecular level. We investigated the binding and cell adhesion properties of hemolin from H. cecropia and demonstrated that the proteins could homodimerize in presence of calcium. Moreover, a higher molecular weight membrane form of hemolin was present on hemocytes. These results, taken together with an earlier finding that soluble hemolin inhibits hemocyte adhesion, indicated that the secreted hemolin could modulate hemocyte aggregation in a competitive manner in the blood. In addition, hemolin was expressed in different tissues and at different developmental stages. Since hemolin is expressed both during development and during the immune response, its different regulatory factors must act in concert. We found that the third intron contains an enhancer, through which Dif, C/EBP and HMGI synergistically activate a reporter construct in vitro. We concluded that the enhancer is used during infection, since the κB-site is crucial for an immune response. Interestingly, we also found that the active form of the steroid hormone, ecdysone, induces the hemolin gene transcription in vivo, and in addition, acts synergistically during bacterial infection. Preliminary in vivo results indicate a secondary effect of ecdysone and the importance of hormone receptor elements in the upstream promoter region of hemolin. To explore the use of Drosophila as a genetic tool for understanding hemolin function and regulation, we sought to isolate the functional homologue in this species. A fly cDNA library in yeast was screened using H. cecropia hemolin as bait. The screen was not successful. However, it did lead to the discovery of a Drosophila protein with true binding specificity for hemolin. Subsequent characterization revealed a new, highly conserved gene, which we named yippee. Yippee is distantly related to zinc finger proteins and represents a novel family of proteins present in numerous eukaryotes, including fungi, plants and humans. Notably, when the Drosophila genome sequence was revealed, no hemolin orthologue could be detected. Finally, an extensive Drosophila genome chip analysis was initiated. The goal was to investigate the Drosophila immune response, and, in contrast to earlier studies of artificially injected flies, to examine a set of natural microbes, orally and externally applied. In parallel experiments viruses, bacteria, fungi and parasites were compared to unchallenged controls. We obtained a unique set of genes that were up-regulated in the response to the parasite Octosporea muscadomesticae and to the fungus Beauveria bassiana. We expect both down-regulated and up-regulated genes to serve as a source for the discovery of new effector molecules, in particular those that are active against parasites and fungi.

Computational methods for the analysis of protein structure and function

The vast majority of known proteins have not yet been experimentally characterized and little is known about their function. The design and implementation of computational tools can provide insight into the function of proteins based on their sequence, their structure, their evolutionary history and their association with other proteins. Knowledge of the three-dimensional (3D) structure of a protein can lead to a deep understanding of its mode of action and interaction, but currently the structures of <1% of sequences have been experimentally solved. For this reason, it became urgent to develop new methods that are able to computationally extract relevant information from protein sequence and structure. The starting point of my work has been the study of the properties of contacts between protein residues, since they constrain protein folding and characterize different protein structures. Prediction of residue contacts in proteins is an interesting problem whose solution may be useful in protein folding recognition and de novo design. The prediction of these contacts requires the study of the protein inter-residue distances related to the specific type of amino acid pair that are encoded in the so-called contact map. An interesting new way of analyzing those structures came out when network studies were introduced, with pivotal papers demonstrating that protein contact networks also exhibit small-world behavior. In order to highlight constraints for the prediction of protein contact maps and for applications in the field of protein structure prediction and/or reconstruction from experimentally determined contact maps, I studied to which extent the characteristic path length and clustering coefficient of the protein contacts network are values that reveal characteristic features of protein contact maps. Provided that residue contacts are known for a protein sequence, the major features of its 3D structure could be deduced by combining this knowledge with correctly predicted motifs of secondary structure. In the second part of my work I focused on a particular protein structural motif, the coiled-coil, known to mediate a variety of fundamental biological interactions. Coiled-coils are found in a variety of structural forms and in a wide range of proteins including, for example, small units such as leucine zippers that drive the dimerization of many transcription factors or more complex structures such as the family of viral proteins responsible for virus-host membrane fusion. The coiled-coil structural motif is estimated to account for 5-10% of the protein sequences in the various genomes. Given their biological importance, in my work I introduced a Hidden Markov Model (HMM) that exploits the evolutionary information derived from multiple sequence alignments, to predict coiled-coil regions and to discriminate coiled-coil sequences. The results indicate that the new HMM outperforms all the existing programs and can be adopted for the coiled-coil prediction and for large-scale genome annotation. Genome annotation is a key issue in modern computational biology, being the starting point towards the understanding of the complex processes involved in biological networks. The rapid growth in the number of protein sequences and structures available poses new fundamental problems that still deserve an interpretation. Nevertheless, these data are at the basis of the design of new strategies for tackling problems such as the prediction of protein structure and function. Experimental determination of the functions of all these proteins would be a hugely time-consuming and costly task and, in most instances, has not been carried out. As an example, currently, approximately only 20% of annotated proteins in the Homo sapiens genome have been experimentally characterized. A commonly adopted procedure for annotating protein sequences relies on the "inheritance through homology" based on the notion that similar sequences share similar functions and structures. This procedure consists in the assignment of sequences to a specific group of functionally related sequences which had been grouped through clustering techniques. The clustering procedure is based on suitable similarity rules, since predicting protein structure and function from sequence largely depends on the value of sequence identity. However, additional levels of complexity are due to multi-domain proteins, to proteins that share common domains but that do not necessarily share the same function, to the finding that different combinations of shared domains can lead to different biological roles. In the last part of this study I developed and validate a system that contributes to sequence annotation by taking advantage of a validated transfer through inheritance procedure of the molecular functions and of the structural templates. After a cross-genome comparison with the BLAST program, clusters were built on the basis of two stringent constraints on sequence identity and coverage of the alignment. The adopted measure explicity answers to the problem of multi-domain proteins annotation and allows a fine grain division of the whole set of proteomes used, that ensures cluster homogeneity in terms of sequence length. A high level of coverage of structure templates on the length of protein sequences within clusters ensures that multi-domain proteins when present can be templates for sequences of similar length. This annotation procedure includes the possibility of reliably transferring statistically validated functions and structures to sequences considering information available in the present data bases of molecular functions and structures.

Transposable elements: structure and dynamic of the autonomous retrotransposon R2 in Arthropoda with non-canonical reproduction

Eukaryotic ribosomal DNA constitutes a multi gene family organized in a cluster called nucleolar organizer region (NOR); this region is composed usually by hundreds to thousands of tandemly repeated units. Ribosomal genes, being repeated sequences, evolve following the typical pattern of concerted evolution. The autonomous retroelement R2 inserts in the ribosomal gene 28S, leading to defective 28S rDNA genes. R2 element, being a retrotransposon, performs its activity in the genome multiplying its copy number through a “copy and paste” mechanism called target primed reverse transcription. It consists in the retrotranscription of the element’s mRNA into DNA, then the DNA is integrated in the target site. Since the retrotranscription can be interrupted, but the integration will be carried out anyway, truncated copies of the element will also be present in the genome. The study of these truncated variants is a tool to examine the activity of the element. R2 phylogeny appears, in general, not consistent with that of its hosts, except some cases (e.g. Drosophila spp. and Reticulitermes spp.); moreover R2 is absent in some species (Fugu rubripes, human, mouse, etc.), while other species have more R2 lineages in their genome (the turtle Mauremys reevesii, the Japanese beetle Popilia japonica, etc). R2 elements here presented are isolated in 4 species of notostracan branchiopods and in two species of stick insects, whose reproductive strategies range from strict gonochorism to unisexuality. From sequencing data emerges that in Triops cancriformis (Spanish gonochoric population), in Lepidurus arcticus (two putatively unisexual populations from Iceland) and in Bacillus rossius (gonochoric population from Capalbio) the R2 elements are complete and encode functional proteins, reflecting the general features of this family of transposable elements. On the other hand, R2 from Italian and Austrian populations of T. cancriformis (respectively unisexual and hermaphroditic), Lepidurus lubbocki (two elements within the same Italian population, gonochoric but with unfunctional males) and Bacillus grandii grandii (gonochoric population from Ponte Manghisi) have sequences that encode incomplete or non-functional proteins in which it is possible to recognize only part of the characteristic domains. In Lepidurus couesii (Italian gonochoric populations) different elements were found as in L. lubbocki, and the sequencing is still in progress. Two hypothesis are given to explain the inconsistency of R2/host phylogeny: vertical inheritance of the element followed by extinction/diversification or horizontal transmission. My data support previous study that state the vertical transmission as the most likely explanation; nevertheless horizontal transfer events can’t be excluded. I also studied the element’s activity in Spanish populations of T. cancriformis, in L. lubbocki, in L. arcticus and in gonochoric and parthenogenetic populations of B. rossius. In gonochoric populations of T. cancriformis and B. rossius I found that each individual has its own private set of truncated variants. The situation is the opposite for the remaining hermaphroditic/parthenogenetic species and populations, all individuals sharing – in the so far analyzed samples - the majority of variants. This situation is very interesting, because it isn’t concordant with the Muller’s ratchet theory that hypothesizes the parthenogenetic populations being either devoided of transposable elements or TEs overloaded. My data suggest a possible epigenetic mechanism that can block the retrotransposon activity, and in this way deleterious mutations don’t accumulate.

Novel tools for conservation genetics in marine fish: population structure and evolution of the European hake (Merluccius merluccius) inferred by SNP variation and applications to traceability

The research presented in my PhD thesis is part of a wider European project, FishPopTrace, focused on traceability of fish populations and products. My work was aimed at developing and analyzing novel genetic tools for a widely distributed marine fish species, the European hake (Merluccius merluccius), in order to investigate population genetic structure and explore potential applications to traceability scenarios. A total of 395 SNPs (Single Nucleotide Polymorphisms) were discovered from a massive collection of Expressed Sequence Tags, obtained by high-throughput sequencing, and validated on 19 geographic samples from Atlantic and Mediterranean. Genome-scan approaches were applied to identify polymorphisms on genes potentially under divergent selection (outlier SNPs), showing higher genetic differentiation among populations respect to the average observed across loci. Comparative analysis on population structure were carried out on putative neutral and outlier loci at wide (Atlantic and Mediterranean samples) and regional (samples within each basin) spatial scales, to disentangle the effects of demographic and adaptive evolutionary forces on European hake populations genetic structure. Results demonstrated the potential of outlier loci to unveil fine scale genetic structure, possibly identifying locally adapted populations, despite the weak signal showed from putative neutral SNPs. The application of outlier SNPs within the framework of fishery resources management was also explored. A minimum panel of SNP markers showing maximum discriminatory power was selected and applied to a traceability scenario aiming at identifying the basin (and hence the stock) of origin, Atlantic or Mediterranean, of individual fish. This case study illustrates how molecular analytical technologies have operational potential in real-world contexts, and more specifically, potential to support fisheries control and enforcement and fish and fish product traceability.

Human TNF receptor p75/80 gene structure and promoter characterization

Tumor necrosis factor receptor p75/80 ((TNF-R p75/80) is a 75 kDa type 1 transmembrane protein expressed predominately on cells of hematopoietic lineage. TNF-R p75/80 belongs to the TNF receptor superfamily characterized by cysteine-rich extracellular regions composed of three to six disulfide-linked domains. In the present report, we have characterized, for the first time, the complete gene structure for human TNF-R p75/80 which spans approximately 43 kbp. The gene consists of 10 exons (ranging from 34 bp to 2.5 kbp) and 9 introns (343 bp to 19 kbp). Consensus elements for transcription factors involved in T cell development and activation were noted in the 5$\sp\prime$ flanking region including TCF-1, Ikaros, AP-1, CK-2, IL-6RE, ISRE, GAS, NF-$\kappa$B and SP1, as well as an unusually high GC content and CpG frequency that appears characteristic of some TNF-R family members. The unusual (GATA)$\sb{\rm n}$ and (GAA)(GGA) repeats found within intron 1 may prove useful for further genome analysis within the 1p36 chromosomal locus. The human TNF-R p75/80 gene structure will permit further assessment of its involvement in normal hematopoietic cell development and function, autoimmune disease, and non-random translocations in hematopoietic malignancies. The region 1.8 kb 5$\sp\prime$ of the ATG was able to drive luciferase expression when transfected into cell lines expressing TNF-R p75/80. Further characterization of the 5$\sp\prime$-regulatory region will aid in determining factors and signal transduction pathways involved in regulating TNF-R p75/80 expression. ^

Primary structure and evolutionary relationship between the adult alpha-globin genes and their 5'-flanking regions of Xenopus laevis and Xenopus tropicalis

To investigate the evolution of globin genes in the genus Xenopus, we have determined the primary structure of the related adult alpha I- and alpha II-globin genes of X. laevis and of the adult alpha-globin gene of X. tropicalis, including their 5'-flanking regions. All three genes are comprised of three exons and two introns at homologous positions. The exons are highly conserved and code for 141 amino acids. By contrast, the corresponding introns vary in length and show considerable divergence. Comparison of 900 bp of the 5'-flanking region revealed that the X. tropicalis gene contains a conserved proximal 310-bp promoter sequence, comprised of the canonical TATA and CCAAT motifs at homologous positions, and five conserved elements in the same order and at similar positions as previously shown for the corresponding genes of X. laevis. We therefore conclude that these conserved upstream elements may represent regulatory sequences for cell-specific regulation of the adult Xenopus globin genes.

Intracellular membrane association of the N-terminal domain of classical swine fever virus NS4B determines viral genome replication and virulence.

Classical swine fever virus (CSFV) causes a highly contagious disease in pigs that can range from a severe haemorrhagic fever to a nearly unapparent disease, depending on the virulence of the virus strain. Little is known about the viral molecular determinants of CSFV virulence. The nonstructural protein NS4B is essential for viral replication. However, the roles of CSFV NS4B in viral genome replication and pathogenesis have not yet been elucidated. NS4B of the GPE-  vaccine strain and of the highly virulent Eystrup strain differ by a total of seven amino acid residues, two of which are located in the predicted trans-membrane domains of NS4B and were described previously to relate to virulence, and five residues clustering in the N-terminal part. In the present study, we examined the potential role of these five amino acids in modulating genome replication and determining pathogenicity in pigs. A chimeric low virulent GPE- -derived virus carrying the complete Eystrup NS4B showed enhanced pathogenicity in pigs. The in vitro replication efficiency of the NS4B chimeric GPE-  replicon was significantly higher than that of the replicon carrying only the two Eystrup-specific amino acids in NS4B. In silico and in vitro data suggest that the N-terminal part of NS4B forms an amphipathic α-helix structure. The N-terminal NS4B with these five amino acid residues is associated with the intracellular membranes. Taken together, this is the first gain-of-function study showing that the N-terminal domain of NS4B can determine CSFV genome replication in cell culture and viral pathogenicity in pigs.

Cloning, characterization and regulation of the soluble guanylyl cyclase alpha1 and beta1 genes

Cell signaling by nitric oxide (NO) through soluble guanylyl cyclase (sGC) and cGMP production regulates physiological responses such as smooth muscle relaxation, neurotransmission, and cell growth and differentiation. Although the NO receptor, sGC, has been studied extensively at the protein level, information on regulation of the sGC genes remains elusive. In order to understand the molecular mechanisms involved at the level of gene expression, cDNA and genomic fragments of the murine sGCα1 subunit gene were obtained through library screenings. Using the acquired clones, the sGCα 1 gene structure was determined following primer extension, 3 ′RACE and intron/exon boundary analyses. The basal activity of several 5′-flanking regions (putative promoter regions) for both the α1 and β1 sGC subunits were determined following their transfection into mouse N1E-115 neuroblastoma and rat RENE1Δ14 uterine epithelial cells using a luciferase reporter plasmid. Using the sGC sequences, real-time RT-PCR assays were designed to measure mRNA levels of the sGC α1 and β1 genes in rat, mouse and human. Subsequent studies found that uterine sGC mRNA and protein levels decreased rapidly in response to 17β-estradiol (estrogen) in an in vivo rat model. As early as 1 hour following treatment, mRNA levels of both sGC mRNAs decreased, and reached their lowest level of expression after 3 hours. This in vivo response was completely blocked by the pure estrogen receptor antagonist, ICI 182,780, was not seen in several other tissues examined, did not occur in response to other steroid hormones, and was due to a post-transcriptional mechanism. Additional studies ex vivo and in various cell culture models suggested that the estrogen-mediated decreased sGC mRNA expression did not require signals from other tissues, but may require cell communication or paracrine factors between different cell types within the uterus. Using chemical inhibitors and molecular targeting in other related studies, it was revealed that c-Jun-N-terminal kinase (JNK) signaling was responsible for decreased sGC mRNA expression in rat PC12 and RFL-6 cells, two models previously determined to exhibit rapid decreased sGC mRNA expression in response to different stimuli. To further investigate the post-transcriptional gene regulation, the full length sGCα1 3′-untranslated region (3′UTR) was cloned from rat uterine tissue and ligated downstream of the rabbit β-globin gene and expressed as a chimeric mRNA in the rat PC12 and RFL-6 cell models. Expression studies with the chimeric mRNA showed that the sGCα 1 3′UTR was not sufficient to mediate the post-transcriptional regulation of its mRNA by JNK or cAMP signaling in PC12 and RFL-6 cells. This study has provided numerous valuable tools for future studies involving the molecular regulation of the sGC genes. Importantly, the present results identified a novel paradigm and a previously unknown signaling pathway for sGC mRNA regulation that could potentially be exploited to treat diseases such as uterine cancers, neuronal disorders, hypertension or various inflammatory conditions. ^

The Optimal Capital Structure of Banks: Balancing Deposit Insurance, Capital Requirements and Tax-Advantaged Debt

The capital structure and regulation of financial intermediaries is an important topic for practitioners, regulators and academic researchers. In general, theory predicts that firms choose their capital structures by balancing the benefits of debt (e.g., tax and agency benefits) against its costs (e.g., bankruptcy costs). However, when traditional corporate finance models have been applied to insured financial institutions, the results have generally predicted corner solutions (all equity or all debt) to the capital structure problem. This paper studies the impact and interaction of deposit insurance, capital requirements and tax benefits on a bankÇs choice of optimal capital structure. Using a contingent claims model to value the firm and its associated claims, we find that there exists an interior optimal capital ratio in the presence of deposit insurance, taxes and a minimum fixed capital standard. Banks voluntarily choose to maintain capital in excess of the minimum required in order to balance the risks of insolvency (especially the loss of future tax benefits) against the benefits of additional debt. Because we derive a closed- form solution, our model provides useful insights on several current policy debates including revisions to the regulatory framework for GSEs, tax policy in general and the tax exemption for credit unions.