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Zombie Lending and Depressed Restructuring in Japan
Caballero, Ricardo J. - 2010
In this paper, we propose a bank-based explanation for the decade-long Japanese slowdown following the asset price collapse in the early 1990s. We start with the well-known observation that most large Japanese banks were only able to comply with capital standards because regulators were lax in...
Persistent link: https://www.econbiz.de/10012761673
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Liquidity Risk, Liquidity Creation and Financial Fragility : A Theory of Banking
Diamond, Douglas W. - 2010
Both investors and borrowers are concerned about liquidity. Investors desire liquidity because they are uncertain about … when they will want to eliminate their holding of a financial asset. Borrowers are concerned about liquidity because they … compensation for the illiquidity investors will be subject to. We argue that banks can resolve these liquidity problems that arise …
Persistent link: https://www.econbiz.de/10012763345
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Liquidity Crises in Emerging Markets : Theory and Policy
Chang, Roberto; Velasco, Andrés - 2022
We build a model of financial sector illiquidity in an open economy. Illiquidity defined as a situation in which a country's consolidated financial system has potential short-term obligations in foreign currency that exceed the amount of foreign currency it can have access to on short notice can...
Persistent link: https://www.econbiz.de/10013321588
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Causes of the Korean Financial Crisis : Lessons for Policy
Hahm, Joon-Ho; Mishkin, Frederic S. - 2022
This paper uses an asymmetric information framework to understand the causes of the recent financial crisis in Korea. It shows that the Korean data is consistent with this explanation of the crisis. It then draws on this analysis to discuss several lessons that can help guide Korean policymakers...
Persistent link: https://www.econbiz.de/10013311629
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Pillar 1 vs. Pillar 2 Under Risk Management
Schaefer, Stephen M. - 2012
Under the New Basel Accord bank capital adequacy rules (Pillar 1) are substantially revised but the introduction of two new quot;Pillarsquot; is, perhaps, of even greater significance. This paper focuses on Pillar 2 which expands the range of instruments available to the regulator when...
Persistent link: https://www.econbiz.de/10012755627
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Basel Ii : A Contracting Perspective
Kane, Edward J. - 2010
Financial safety nets are incomplete social contracts that assign responsibility to various economic sectors for preventing, detecting, and paying for potentially crippling losses at financial institutions. This paper uses the theories of incomplete contracts and sequential bargaining to...
Persistent link: https://www.econbiz.de/10012760523
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Are Prudential Supervision and Regulation Pillars of Financial Stability? Evidence from the Great Depression
Mitchener, Kris James - 2010
Drawing on the variation in financial distress across U.S. states during the Great Depression, this article suggests how bank supervision and regulation affected banking stability during the Great Depression. In response to well-organized interest groups and public concern over the bank failures...
Persistent link: https://www.econbiz.de/10012761727
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Can the European Community Afford to Neglect the Need for More Accountable Safety-Net Management?
Kane, Edward J. - 2010
As financial institutions and markets transact more and more cross-border business, gaps and flaws in national safety nets become more consequential. Because citizens of host (home) countries may be made to pay for mistakes made in the home (host) country, Basel's lead-regulator paradigm...
Persistent link: https://www.econbiz.de/10012761789
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Bank Supervision, Regulation, and Instability During the Great Depression
Mitchener, Kris James - 2010
Even after controlling for local economic conditions, differences in state bank supervision and regulation contribute toward explaining the large variation in state bank suspension rates across U.S. counties during the Great Depression. More stringent capital requirements lowered suspension...
Persistent link: https://www.econbiz.de/10012762636
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Bank Regulation and Supervision : What Works Best?
Barth, James R. - 2010
This paper uses our new database on bank regulation and supervision in 107 countries to assess the relationship between specific regulatory and supervisory practices and banking-sector development, efficiency, and fragility. The paper examines: (i) regulatory restrictions on bank activities and...
Persistent link: https://www.econbiz.de/10012762904