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Why Do We Need Both Liquidity Regulations and a Lender of Last Resort? A Perspective from Federal Reserve Lending During the 2007-09 US Financial Crisis

Carlson, Mark - 2015

During the 2007-09 financial crisis, there were severe reductions in the liquidity of financial markets, runs on the … Reserve, in its role as lender of last resort (LOLR), injected extraordinary amounts of liquidity. In the aftermath, lawmakers … introduction of liquidity regulations. These changes were motivated in part by the argument that central bank lending entails …

Persistent link: https://www.econbiz.de/10013026757

Assessing Bankruptcy Reform in a Model with Temptation and Equilibrium Default

Nakajima, Makoto - 2015

A life-cycle model with equilibrium default in which consumers with and without temptation coexist is constructed to evaluate the 2005 bankruptcy law reform and other counterfactual reforms. The calibrated model indicates that the 2005 bankruptcy reform achieves its goal of reducing the number...

Persistent link: https://www.econbiz.de/10013026767

Different Types of Central Bank Insolvency and the Central Role of Seignorage

Reis, Ricardo - 2015

A central bank is insolvent if its plans imply a Ponzi scheme on reserves so the price level becomes infinity. If the central bank enjoys fiscal support, in the form of a dividend rule that pays out net income every period, including when it is negative, it can never become insolvent...

Persistent link: https://www.econbiz.de/10013021867

Secondary Market Liquidity and the Optimal Capital Structure

Arseneau, David M. - 2015

We present a model where endogenous liquidity generates a feedback loop between secondary market liquidity and firms … markets, and search frictions in over-the-counter secondary markets. Our concept of liquidity depends endogenously on illiquid … assets put up for sale relative to the resources available for buying those assets in the secondary market. Liquidity …

Persistent link: https://www.econbiz.de/10013021987

Global Liquidity and Commodity Prices

Kang, Hyunju - 2015

investigates whether the impact of global liquidity on commodity prices has grown since the crisis. For the agricultural products … with global liquidity to address the short-run relationship between global liquidity and commodity prices. The key finding … is that the effect of global liquidity has been more pronounced for energy and metals commodity prices since the global …

Persistent link: https://www.econbiz.de/10013022467

Bankruptcy Discharge and the Emergence of Debtor Rights in Eighteenth Century England

Carlos, Ann M. - 2015

Bankruptcy is a precise legal process defining the rules when debtor fails to repay their debts. These rules determine willingness to lend and to borrow and thus can affect economic growth. In 1706, the English Parliament passed a bankruptcy statute that provided potential rights for bankrupts...

Persistent link: https://www.econbiz.de/10013022538

Short-Sales Constraints and Liquidity Change : Cross-Sectional Evidence from the Hong Kong Market

Bai, Min - 2015

This study investigates the impact of short-sales constraints on liquidity for individual stocks in Hong Kong, as the …: Following the repealing of short-sales constraints, only large, illiquid and inactively traded firms increase in liquidity …; while others significantly drop in prices and liquidity. Following the imposing of short-sales constraints, only inactively …

Persistent link: https://www.econbiz.de/10013022796

Unemployment as an Adverse Trigger Event for Mortgage Default

Tian, Chao Yue - 2015

There is limited evidence of the role of household-level adverse trigger events in driving mortgage default, and the evidence based on proxies, such as the unemployment rate, is inconsistent. Using a survey of low- and moderate-income homeowners with community reinvestment mortgages, we study...

Persistent link: https://www.econbiz.de/10013010143

Commercial Real Estate, Distress and Financial Resolution : Portfolio Lending versus Securitization

Downs, David H. - 2015

This paper examines the contrasting influence of portfolio lending and securitization in the resolution of distressed commercial real estate. The empirical analysis utilizes a large and unique data set of distressed commercial mortgages. The data set is constructed based on the recent financial...

Persistent link: https://www.econbiz.de/10013016408

Default Premium

Catão, Luis - 2015

We re-assess the view that sovereigns with a history of default are charged only a small and/or short-lived premium on the interest rate warranted by observed fundamentals. Our reassessment uses a metric of such a “default premium” (DP) that is consistent with asymmetric information models...

Persistent link: https://www.econbiz.de/10013016580