The dissertation investigates the impact of a non-risk-weighted leverage ratio on the stability of financial institutions. We calculate leverage ratios (LR) and estimate probabilities of default (PD) and find a significant positive relationship between LR and PD. This might be explained by the...

We study the optimal portfolio choice of international investors when variances and correlations are stochastic. We assume that the returns from the perspective of the domestic investor are driven by a Wishart Affine Stochastic Correlation (WASC) model. We show that this also holds from the...

Currency carry trading presents a widespread trading strategy and refers to the forward premium puzzle. Investors borrow low-yielding currencies with the aim to invest in high-yielding ones in order to benefit from arbitrage opportunities. This implies that a one-to-one relationship does not...

This paper analyzes whether differences in bank earnings management across countries can be linked to differences in the prevailing institutional and regulatory framework. Using a broad sample of 21,895 banks from 47 countries over the period 1990 to 2006, we consider three dimensions along...