Showing 1 - 10 of 475
Today’s regulatory rules, especially the easily-manipulated measures of regulatory capital, have led to costly bank failures. We design a robust regulatory system such that (i) bank losses are credibly borne by the private sector (ii) systemically important institutions cannot collapse...
Persistent link: https://www.econbiz.de/10011083692
We propose a new form of hybrid capital for banks, Equity Recourse Notes (ERNs), which ameliorate booms and busts by creating counter-cyclical incentives for banks to raise capital, and so encourage bank lending in bad times. They avoid the flaws of existing contingent convertible bonds...
Persistent link: https://www.econbiz.de/10011083972
. Consistent with such recourse, we find that conduits provided little risk transfer during the "run": losses from conduits …
Persistent link: https://www.econbiz.de/10011084084
We analyze securities trading by banks and the associated spillovers to the supply of credit. Empirical analysis has been elusive due to the lack of securities register for banks. We use a unique, proprietary dataset that has the investments of banks at the security level for 2005-2012 in...
Persistent link: https://www.econbiz.de/10011196029
A key dimension of fiscal policy during the financial crisis was massive government support for the banking system. The macroeconomic effects of that support have, so far, received little attention in the literature. This paper fills this gap, using a quantitative dynamic model with a banking...
Persistent link: https://www.econbiz.de/10011083280
large amount of aggregate tail risk is missing from the price of financial sector crash insurance during the financial …
Persistent link: https://www.econbiz.de/10011083289
provide capital, and banks, which may take excess risk if they believe the regulator will provide capital. When the regulator … low cost of injecting capital may forbear on bad banks to signal toughness and reduce risk taking, and (ii) A regulator …
Persistent link: https://www.econbiz.de/10011084160
Deteriorating public finances around the world raise doubts about countries’ abilities to bail out their largest banks. For an international sample of banks, this paper investigates the impact of government indebtedness and deficits on bank stock prices and CDS spreads. Overall, bank stock...
Persistent link: https://www.econbiz.de/10008550325
Can banks maintain their advantage as liquidity providers when they are heavily exposed to a financial crisis? The standard argument - that banks can - hinges on deposit inflows that are seeking a safe haven and provide banks with a natural hedge to fund drawn credit lines and other commitments....
Persistent link: https://www.econbiz.de/10009399713
This paper examines whether multinational banks have a stabilising or a destabilising role during times of financial distress. With a focus on Europe, it looks at how these banks’ foreign affiliates have been faring during the recent financial crisis. It finds that retail and corporate lending...
Persistent link: https://www.econbiz.de/10008468703