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Dealers’ Insurance, Market Structure, and Liquidity

Carapella, Francesca - 2020

of over-the-counter securities markets. We find that such regulations promote entry of dealers, thus fostering …. General equilibrium effects imply that more competition can distort incentives of all dealers to invest in efficient …

Persistent link: https://www.econbiz.de/10012835089

Liquidity Risk in Markets with Trading Frictions : What Can Swing Pricing Achieve?

Lewrick, Ulf - 2017

Open-end mutual funds expose themselves to liquidity risk by granting their investors the right to daily redemptions at … of large destabilising outflows.Optimal swing pricing balances this risk with the benefit of providing liquidity to cash …-constrained investors. We derive bounds, depending on trading costs and the share of liquidity-constrained investors, within which a fund …

Persistent link: https://www.econbiz.de/10012945827

Prudential Policies and Their Impact on Credit in the United States

Calem, Paul Seth - 2017

We analyze how two types of recently used prudential policies affected the supply of credit in the United States. First, we test whether the U.S. bank stress tests had any impact on the supply of mortgage credit. We find that the first Comprehensive Capital Analysis and Review (CCAR) stress test...

Persistent link: https://www.econbiz.de/10012956546

Post-Crisis International Financial Regulatory Reforms : A Primer

Borio, Claudio E. V. - 2020

This paper reviews post-crisis financial regulatory reforms, examines how they fit together and identifies open issues. Specifically, it takes stock of the salient new features of bank and CCP international standards within a unified analytical framework. The key notion in this framework is...

Persistent link: https://www.econbiz.de/10012835929

Dollar Borrowing, Firm-Characteristics, and FX-Hedged Funding Opportunities

Gambacorta, Leonardo - 2020

We explore the link between firms' dollar bond borrowing and their FX-hedged funding opportunities, as reflected in a positive corporate basis (the relative cost of local to synthetic currency borrowing). Consistent with previous research, we first document that firms substitute domestic for...

Persistent link: https://www.econbiz.de/10012840120

Is the Price Right? Swing Pricing and Investor Redemptions

Lewrick, Ulf - 2017

How effective are available policy tools in managing liquidity risks in the mutual fund industry? We assess one such …

Persistent link: https://www.econbiz.de/10012945825

Redemption Risk and Cash Hoarding by Asset Managers

Morris, Stephen - 2017

Open-end mutual funds face redemptions by investors, but the sale of the underlying assets depends on the portfolio decision of asset managers. If asset managers use their cash holding as a buffer to meet redemptions, they can mitigate fire sales of the underlying asset. If they hoard cash in...

Persistent link: https://www.econbiz.de/10012964215

Leverage on the Buy Side

Avalos, Fernando H. - 2015

This paper investigates the microeconomic determinants of leverage decisions by asset managers. Investment funds (the "buy side") have significantly increased their share of global capital flows in recent years. Unconventional monetary policies in advanced economies have squeezed returns while...

Persistent link: https://www.econbiz.de/10013014248

Investor Redemptions and Fund Manager Sales of Emerging Market Bonds : How are They Related?

Shek, Jimmy - 2015

Lending to emerging market economies (EMEs) through bond purchases has surged since 2009. What are the risks of a sudden stop? Bond mutual funds may curtail credit through two channels. The first is redemptions by ultimate investors. The second is additional discretionary sales by fund managers,...

Persistent link: https://www.econbiz.de/10013016995

Are Star Funds Really Shining? Cross-Trading and Performance Shifting in Mutual Fund Families

Eisele, Alexander - 2016

The majority of financial trades take place in open and highly regulated markets. As an alternative venue, large asset managers sometimes offset the trades of affiliated funds in an internal market, without relying on external facilities or supervision. In this paper, we employ institutional...

Persistent link: https://www.econbiz.de/10012984263