I evaluate a bank's incentives to implement a risk sensitive regulatory capital rule and to invest in improved risk measurement. The decision making is analyzed within a real options framework where optimal policies are derived in terms of threshold levels of risk. I also evaluate the situation...

The presence of mean reversion in profitability at the firm level is important for valuation and prediction of growth and earnings. We investigate the mean reversion in accounting profitability for Norwegian non-listed firms for the period 1988-2006. We find a mean reversion rate of about 0.44....

We investigate the relationship between bankruptcy risk and expected future sales growth for Norwegian non-listed firms for the period 1988-2007. We find that firms with high bankruptcy risk also have high expected future growth. Financial ratios characterizing firms with high bankruptcy risk...

Siden finansuroen begynte i 2007 har mange banker verden over opplevd kraftig fall i aksjekursen og økte risikopåslag i prisene på gjeldsfinansiering. Grunnen til dette er i all hovedsak at markedet forventet redusert inntjening og at sannsynligheten for fremtidige betalingsproblemer i...

Capital and liquidity requirements for Norwegian banks are being gradually tightened. This paper presents the alternatives Norwegian banks have for complying with stricter capital regulation and the forthcoming LCR. Norwegian banks have so far primarily used retained earnings to strengthen their...

During the recent global financial crisis, numerous banking institutions faced acute capital strain. In order to support banking sectors, many governments stepped in and propped up financial institutions, often at the expense of the taxpayer. As a result, much regulatory work has focused on...

I denne artikkelen benytter vi en modell for å belyse insentivene banker har til å velge nivåene på kapitaldekning og utlånsvekst når de står overfor et regulatorisk kapitalkrav og regler om tvungen konvertering av gjeld («bail-in»). Vi ser også på regelen om at banker må...

The world witnessed a meltdown in financial markets in March 2020 as the Covid-19 pandemic hit the global economy. In this memo we document how the turbulence affected Norwegian financial markets. We describe possible mechanisms behind the stress in the Norwegian foreign exchange and bond...