We develop a theoretical model of mortgage loss rates that evaluates their main underlying risk factors. Following the model, loss rates are positively influenced by the house price level, the loan-to-value of mortgages, interest rates, and the unemployment rate. They are negatively influenced...

We develop a theoretical model of mortgage loss rates that evaluates their main underlying risk factors. Following the model, loss rates are positively influenced by the house price level, the loan-to-value of mortgages, interest rates, and the unemployment rate. They are negatively influenced...

Empirical evidence suggests that many mergers do not increase profits of the participating firms and decrease welfare. Due to the globalization of markets we should take an international view on mergers and their welfare effects. This paper develops a Bertrand-model of an international...

This paper examines the impact of implicit guarantees and capital regulations on the behavior of a bank and on the expected losses for its depositors. I show that implicit guarantees increase the incentives of the bank to enhance leverage and/or risk taking and that this leads to higher expected...

Ageing of most societies is driven by two factors: (1) birth rates are declining and (2) people are living longer. These developments have substantial effects on economies and, in particular, on the funding of our living standards in retirement. We develop an overlapping generation model in...

This paper evaluates the potential value of a weather index insurance for the agriculture sector in an high income country (Germany). In our theoretical analysis we model an index insurance, a loss-based insurance market as well as a combination of both kinds of insurance and compare the...

In this paper, I analyze the effectiveness of different capital regulations in mitigating the effects of moral hazard that exists only for systemically important banks. Leverage restrictions have the potential to reduce the fraction of banks that are systemically important but do not mitigate...