Leverage Bubbles.

This paper investigates the relation between liquidity and asset prices. It shows that, when banks balance sheets are marked to market and banks are targeting a financial leverage level - a situation similar to current environment - formation of Leverage Bubble phenomenon and suggests a new regulation rule based on a Dynamic Leverage Ratio (DLR) rule.

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Year of publication:	2009-05
Authors:	Triki, Fares
Institutions:	Centre d'Économie de la Sorbonne, Université Paris 1 (Panthéon-Sorbonne)
Subject:	Financial crises \| rational bubbles \| dynamic leverage ratio \| mark to market accounting \| asset pricing \| macroprudential regulation \| market liquidity

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Extent:	application/pdf
Series:	Documents de travail du Centre d'Economie de la Sorbonne. - ISSN 1955-611X.
Type of publication:	Book / Working Paper
Language:	English
Notes:	16 pages
Classification:	G01 - Financial Crises ; G14 - Information and Market Efficiency; Event Studies ; G18 - Government Policy and Regulation ; G20 - Financial Institutions and Services. General ; G28 - Government Policy and Regulation
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10004999117