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Imperfect Competition in the Inter-Bank Market for Liquidity as a Rationale for Central Banking

Acharya, Viral V; Gromb, Denis; Yorulmazer, Tanju - C.E.P.R. Discussion Papers - 2008

We study liquidity transfers between banks through the interbank borrowing and asset sale markets when (i) surplus banks providing liquidity have market power, (ii) there are frictions in the lending market due to moral hazard, and (iii) assets are bank-specific. We show that when the outside...

Persistent link: https://www.econbiz.de/10005791217

Credit Rationing and Crowding-Out During the Industrial Revolution: Evidence from Hoare's Bank, 1702-1862

Temin, Peter; Voth, Hans-Joachim - C.E.P.R. Discussion Papers - 2004

Crowding-out during the British Industrial Revolution has long been one of the leading explanations for slow growth during the Industrial Revolution, but little empirical evidence exists to support it. We argue that examinations of interest rates are fundamentally misguided, and that the...

Persistent link: https://www.econbiz.de/10005504267

Information Contagion and Inter-Bank Correlation in a Theory of Systemic Risk

Acharya, Viral V; Yorulmazer, Tanju - C.E.P.R. Discussion Papers - 2003

Two aspects of systemic risk, the risk that banks fail together, are modeled and their interaction examined. First, the ex-post aspect, in which the failure of a bank brings down a surviving bank as well, and second, the ex-ante aspect, in which banks endogenously hold correlated portfolios...

Persistent link: https://www.econbiz.de/10005504423

The Political Origin of Pension Funding

Perotti, Enrico C; Schwienbacher, Armin - C.E.P.R. Discussion Papers - 2007

The paper seeks to explain the huge cross country variation in private pension funding, shaped by historical choice made when universal pension systems were created after the Great Depression. According to Perotti and von Thadden (2006), large inflationary shocks due to war damage devastated...

Persistent link: https://www.econbiz.de/10005504507

Finance and Efficiency: Do Bank Branching Regulations Matter?

Acharya, Viral V; Imbs, Jean; Sturgess, Jason - C.E.P.R. Discussion Papers - 2007

We use portfolio theory to quantify the efficiency of state-level sectoral patterns of production in the United States. On the basis of observed growth in sectoral value added output, we calculate for each state the efficient frontier for investments in the real economy, the efficient Sharpe...

Persistent link: https://www.econbiz.de/10005504526

Banking Crises and Bank Rescues: The Role of Reputation

Corbett, Jennifer; Mitchell, Janet - C.E.P.R. Discussion Papers - 2000

This paper focuses on bank rescue packages and on the behaviour of troubled banks in light of rescue offers. A puzzling feature of experience with banking crises is that in many cases policy authorities make offers of bank rescue, and banks are reluctant to accept these offers. We study...

Persistent link: https://www.econbiz.de/10005504727

US Banking Deregulation, Small Businesses and Interstate Insurance of Personal Income

Demyanyk, Yuliya; Ostergaard, Charlotte; Sørensen, Bent E - C.E.P.R. Discussion Papers - 2006

We estimate the effects of deregulation of U.S. banking restrictions on the amount of interstate personal income insurance during the period 1970--2001. Interstate income insurance occurs when personal income reacts less than one-to-one to state-specific shocks to output. We find that income...

Persistent link: https://www.econbiz.de/10005504729

Multinational Bank Regulation with Deposit Insurance and Diversification Effects

Lóránth, Gyöngyi; Morrison, Alan - C.E.P.R. Discussion Papers - 2003

We analyse a model in which bank deposits are insured and there is an exogenous cost of bank capital. The former effect results in bank over-investment and the latter in under-investment. Regulatory capital requirements introduce investment distortions, which are a constrained optimal response...

Persistent link: https://www.econbiz.de/10005504747

Bank Mergers, Competition and Liquidity

Carletti, Elena; Hartmann, Philipp; Spagnolo, Giancarlo - C.E.P.R. Discussion Papers - 2004

We model the impact of bank mergers on loan competition, reserve holdings and aggregate liquidity. A merger creates an … them to the degree of loan market competition. Large mergers tend to increase aggregate liquidity needs, and thus the … liquidity provision in monetary operations by the central bank. Fiercer loan market competition seems to be beneficial for …

Persistent link: https://www.econbiz.de/10005497912

Information Sharing, Lending and Defaults: Cross-Country Evidence

Jappelli, Tullio; Pagano, Marco - C.E.P.R. Discussion Papers - 1999

Theory predicts that information sharing among lenders attenuates adverse selection and moral hazard, and can therefore increase lending and reduce default rates. To test these predictions, we construct a new international data set on private credit bureaus and public credit registers. We find...

Persistent link: https://www.econbiz.de/10005497918