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countries experiencing systemic banking crises on profitability, credit, and the performance of borrower firms. Crisis exposures … for foreign borrowers, including in countries not experiencing banking crises. Our results document the extent of cross …
Persistent link: https://www.econbiz.de/10012181946
We present the first micro-level evidence of the transmission of shocks through financial networks. Using the network of credit default swap (CDS) transactions between banks, we identify bank CDS returns attributable to counterparty losses. A bank's own CDS spread increases whenever...
Persistent link: https://www.econbiz.de/10011710164
This paper analyzes the run on Continental Illinois in 1984. We find that the run slowed but did not stop following an extraordinary government intervention, which included the guarantee of all liabilities of the bank and a commitment to provide ongoing liquidity support. Continental's outflows...
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I develop a model where the sovereign debt capacity depends on the capitalization of domestic banks. Low-capital banks optimally tilt their government bond portfolio toward domestic securities, linking their destiny to that of the sovereign. If the sovereign risk is sufficiently high,...
Persistent link: https://www.econbiz.de/10011710170
As a result of legal restrictions on branch banking, an extensive interbank system developed in the United States … interbank system to meet seasonal and other demands, but the system also transmitted shocks during banking panics. The Federal … Reserve was established in 1914 to reduce reliance on the interbank market and correct other defects that caused banking …
Persistent link: https://www.econbiz.de/10011578151
the period from 1870-2010 across 69 countries. U.S. monetary policy tightening increases the probability of banking crises … probability of banking crises increases. These findings suggest that the effect of U.S. monetary policy in global banking crises …
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