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A dynamic analysis of bank bailouts and constructive ambiguity

Eijffinger, Sylvester C W; Nijskens, Rob - C.E.P.R. Discussion Papers - 2012

Bailout expectations have led banks to behave imprudently, holding too little capital and relying too much on short term funding to finance long term investments. This paper presents a model to rationalize a constructive ambiguity approach to liquidity assistance as a solution to forbearance....

Persistent link: https://www.econbiz.de/10011083609

Lessons from the 2007 Financial Crisis

Buiter, Willem H. - C.E.P.R. Discussion Papers - 2007

adequacy requirements, privately rational but socially inefficient disintermediation, and competitive international de-regulation … insolvency laws for the banking sector contributed to the financial disarray. Despite this, it may well be possible to minimize …

Persistent link: https://www.econbiz.de/10005791213

When bigger isn’t better: Bail outs and bank behaviour

Li, Han Hao; Miller, Marcus; Zhang, Lei - C.E.P.R. Discussion Papers - 2011

The traditional theory of commercial banking explains maturity transformation and liquidity provision assuming no … Commission on Banking (2011), chaired by Sir John Vickers. …

Persistent link: https://www.econbiz.de/10009320408

Securitization and Compensation in Financial Institutions

Inderst, Roman; Pfeil, Sebastian - C.E.P.R. Discussion Papers - 2010

We analyze the interaction between financial institutions' internal compensation policy, the quality of loans, and their securitization decision. We also assess the case for requiring financial institutions to defer bonus pay so as to make incentives more commensurate with the longer-term risk...

Persistent link: https://www.econbiz.de/10008692310

Multinational Banking in Europe: Financial Stability and Regulatory Implications Lessons from the Financial Crisis

Barba Navaretti, Giorgio; Calzolari, Giacomo; Levi, Micol; … - C.E.P.R. Discussion Papers - 2010

evidence uses both aggregate evidence on foreign claims worldwide, and firm-level evidence on the behaviour of banking groups …

Persistent link: https://www.econbiz.de/10008468703

Bank Capital, Liquid Reserves, and Insolvency Risk

Hugonnier, Julien; Morellec, Erwan - C.E.P.R. Discussion Papers - 2015

We develop a dynamic model to assess the effects of liquidity and leverage requirements on banks' insolvency risk. The model features endogenous capital structure, liquid asset holdings, payout, and default decisions. In the model, banks face taxation, flotation costs of securities, and default...

Persistent link: https://www.econbiz.de/10011165669

How Do Regulators Influence Mortgage Risk? Evidence from an Emerging Market

Campbell, John Y; Ramadorai, Tarun; Ranish, Benjamin - C.E.P.R. Discussion Papers - 2012

To understand the effects of regulation on mortgage risk, it is instructive to track the history of regulatory changes …. However, in developed countries with fairly stable systems of financial regulation, it is difficult to track these effects. We …-changing regulation impacted mortgage lending and risk. We find evidence that regulation has important effects on mortgage rates and …

Persistent link: https://www.econbiz.de/10011083989

Strategic Creditor Passivity, Regulation and Bank Bailouts

Mitchell, Janet - C.E.P.R. Discussion Papers - 1998

This paper analyses two aspects of banking crises: the choices that banks make to passively roll over loans in default …

Persistent link: https://www.econbiz.de/10005791205

Does the European Financial Stability Facility bail out sovereigns or banks? An event study

Horvath, Balint; Huizinga, Harry - C.E.P.R. Discussion Papers - 2011

public finances and banking systems heavily exposed to southern Europe and Ireland benefited, as evidenced by lower sovereign …

Persistent link: https://www.econbiz.de/10009365641

Are banks too big to fail or too big to save? International evidence from equity prices and CDS spreads

Demirguc-Kunt, Asli; Huizinga, Harry - C.E.P.R. Discussion Papers - 2010

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