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The regulatory use of banks' internal models aims at making capital requirements more accurate and reducing regulatory arbitrage, but may also give banks incentives to choose their risk models strategically. Current policy answers to this problem include the use of risk-weight floors and...
Persistent link: https://www.econbiz.de/10013059120
We study the functioning and possible breakdown of the interbank market in the presence of counterparty risk. We allow banks to have private information about the risk of their assets. We show how banks' asset risk affects funding liquidity in the interbank market. Several interbank market...
Persistent link: https://www.econbiz.de/10013153429
parent bank. We fi nd that the rise in counterparty risk substantially decreased the probability of obtaining funds from …
Persistent link: https://www.econbiz.de/10012962465
greater insider ownership leads to less equity issuances. Several tests are consistent with the view that bank insiders are … between bank equity and lending, the results stress that ownership structure can shape the resilience of banks—and hence the …
Persistent link: https://www.econbiz.de/10013243792
We study the functioning and possible breakdown of the interbank market in the presence of counterparty risk. We allow banks to have private information about the risk of their assets. We show how banks’ asset risk affects funding liquidity in the interbank market. Several interbank market...
Persistent link: https://www.econbiz.de/10011605172
We offer a theoretical framework to analyze corporate lending when loan officers must be incentivized to prospect for loans and to transmit the soft information they obtain in that process. We explore how this multi-task agency problem shapes loan officers' compensation, banks' use of soft...
Persistent link: https://www.econbiz.de/10013106196
This paper contributes new evidence on market pricing of rating changes. We examine the relation between spreads and ratings for a very large and comprehensive sample of corporate bonds, which allows us to test for country- and industry-specific effects, as well as to explore the differences...
Persistent link: https://www.econbiz.de/10013061797
We study third-party loan guarantees in a model in which lenders can screen, learn loan quality over time and can sell loans before maturity when in need of liquidity. Loan guarantees improve market liquidity and reduce lending standards, with a positive overall welfare effect. Guarantees...
Persistent link: https://www.econbiz.de/10013403073
We study how the consequences of violations of covenants associated with bank lines of credit to firms vary with the … the heart of a new bank liquidity channel. This channel complements the traditional bank lending channel, which focuses on …
Persistent link: https://www.econbiz.de/10013051172
methodology developed by Amiti and Weinstein (2013) to a rich dataset of matched bank-firm loans in the Portuguese economy for the … growth rate of individual loans in our dataset is decomposed into bank, firm, industry and common shocks. Adverse bank shocks …
Persistent link: https://www.econbiz.de/10012988608