Similar Search Results

Credit, Financial Stability, and the Macroeconomy

Taylor, Alan M. - C.E.P.R. Discussion Papers - 2015

Since the 2008 global financial crisis, and after decades of relative neglect, the importance of the financial system and its episodic crises as drivers of macroeconomic outcomes has attracted fresh scrutiny from academics, policy makers, and practitioners. Theoretical advances are following a...

Persistent link: https://www.econbiz.de/10011213304

Macroeconomics after the crisis – hedgehog or fox?

Miller, Marcus; Zhang, Lei - C.E.P.R. Discussion Papers - 2014

‘pecuniary externalities’. Two that affect borrowers and lenders balance sheets in pro-cyclical fashion are described, along with … measures that might help curb their destabilising effects. These ‘pecuniary externalities’ can be thought of as the unintended … Greenwald and Stiglitz (1986) – that when externalities are present, leaving things to the market may not be ‘constrained Pareto …

Persistent link: https://www.econbiz.de/10011083632

Risk, Uncertainty and Monetary Policy

Bekaert, Geert; Hoerova, Marie; Lo Duca, Marco - C.E.P.R. Discussion Papers - 2010

We document a strong co-movement between the VIX, the stock market option-based implied volatility, and monetary policy. We decompose the VIX into two components, a proxy for risk aversion and expected stock market volatility ("uncertainty"), and analyze their dynamic interactions with monetary...

Persistent link: https://www.econbiz.de/10008784723

The Manipulation of Basel Risk-Weights

Mariathasan, Mike; Merrouche, Ouarda - C.E.P.R. Discussion Papers - 2013

In this paper, we examine the relationship between banks’ approval for the internal ratings-based (IRB) approaches of Basel II and the ratio of risk-weighted over total assets. Analysing a panel of 115 banks from 21 OECD countries that were eventually approved for applying the IRB to their...

Persistent link: https://www.econbiz.de/10011083229

Bailouts And Moral Hazard: How Implicit Government Guarantees Affect Financial Stability

Mariathasan, Mike; Merrouche, Ouarda; Werger, Charlotte - C.E.P.R. Discussion Papers - 2014

The recent crisis has shown that banks in distress can often expect to benefit from (implicit) government guarantees. This paper analyzes a panel of 781 banks from 90 countries to test whether the expectation of individual and systemic government support induces moral hazard. It shows that banks...

Persistent link: https://www.econbiz.de/10011145454

Bad Bank(s) and Recapitalization of the Banking Sector

Schäfer, Dorothea; Zimmermann, Klaus F - C.E.P.R. Discussion Papers - 2009

With banking sectors worldwide still suffering from the effects of the financial crisis, public discussion of plans to place toxic assets in one or more bad banks has gained steam in recent weeks. The following paper presents a plan how governments can efficiently relieve ailing banks from toxic...

Persistent link: https://www.econbiz.de/10005034765

The de Soto Effect

Besley, Timothy J.; Ghatak, Maitreesh - C.E.P.R. Discussion Papers - 2009

This paper explores the consequences of creating and improving property rights so that fixed assets can be used as collateral. This has become a cause célèbre of Hernando de Soto whose views are influential in debates about policy reform concerning property rights. Hence, we refer to the...

Persistent link: https://www.econbiz.de/10005656127

Optimal Debt Contracts and Moral Hazard Along the Business Cycle

Reichlin, Pietro; Siconolfi, Paolo - C.E.P.R. Discussion Papers - 2000

We analyse the Pareto optimal contracts between lenders and borrowers in a model with asymmetric information. The model is a generalization of the Rothschild-Stiglitz pure adverse selection problem to include moral hazard with limited liability contracts. Entrepreneurs with unequal ``abilities"...

Persistent link: https://www.econbiz.de/10005656342

Adverse Selection of Investment Projects and the Business Cycle

Reichlin, Pietro; Siconolfi, Paolo - C.E.P.R. Discussion Papers - 1997

In an economy where entrepreneurs with unequal ‘abilities’ face alternative investment projects, which differ in their degree of risk and productivity, we analyse the Nash equilibrium contracts arising from a banks-borrowers game in the context of asymmetric information. We show that, for a...

Persistent link: https://www.econbiz.de/10005666565

Leverage as a Predictor for Real Activity and Volatility

Kollmann, Robert; Zeugner, Stefan - C.E.P.R. Discussion Papers - 2011

This paper explores the link between the leverage of the US financial sector, of households and of non-financial businesses, and real activity. We document that leverage is negatively correlated with the future growth of real activity, and positively linked to the conditional volatility of...

Persistent link: https://www.econbiz.de/10008915810