The proposed revision of the Swiss Banking Act introduces a public liquidity backstop (PLB) for distressed systemically important banks (SIBs), in part to facilitate resolution. We examine the impact of the PLB on fiscal balances, societal welfare, and the incentives of bank shareholders and...

At the end of 2022, Brazil's National Land Transport Agency (ANTT) launched a public hearing on the proposal for a new risk allocation model in road infrastructure concession contracts. This study illustrates, using the real options methodology, how the proposed design modifies the concession's...

At the end of 2022, Brazil's National Land Transport Agency (ANTT) launched a public hearing on the proposal for a new risk allocation model in road infrastructure concession contracts. This study illustrates, using the real options methodology, how the proposed design modifies the concession's...

This study investigates whether Saitdol loans, a type of governmentguaranteed loan, were allocated to groups that would otherwise be unable to access the loan market without such a guarantee. To assess this, both non-parametric and parametric estimation methods, as proposed by Hendren (2013),...

The phenomenon of political populism and its financial determinants have proved elusive. We utilise the sudden and uneven change in credit conditions during the COVID-19 pandemic and the unprecedented government credit guarantee programme in France to investigate whether liquidity support to...

One of the most pressing issues facing developing economies is how to provide expansion capital for existing businesses. However, this issue is more pressing in China, where private enterprises suffer significant financial constraints from capital market limitations. Therefore, the significance...

Financing sources for urban construction have garnered significant attention globally. Among various financing methods, the urban construction investment bond (UCIB) is unique to China. The UCIB credit spread, which represents the compensation for credit risk, has become a focal point for...

It has been widely believed that bond spreads are positively correlated with related market risks. However, some studies in China's urban investment bond (UIB) market indicate that an increase in real estate market risks usually narrows UIB spreads. This article focused on such puzzle and...

Country image, brand image, and warranty knowledge are essential for evaluation and decision-making. This study examines the effects of these three variables on the purchase intentions of a car as a high-involvement product with high-risk attributes. This study investigates the role of consumer...

The continuously updated database of failures and censored data of numerous products has become large, and on some covariates, information regarding the failure times is missing in the database. As the dataset is large and has missing information, the analysis tasks become complicated and a long...

We evaluate the effects of government loan guarantees (GLGs) on small- and medium-sized enterprises’ (SMEs) credit availability, profitability, and expenditure on research and development (R&D) in China, using data of establishing government loan guarantee platforms (GLGPs) and financial...

To address credit constraints in small-business lending markets, policymakers frequently use loan guarantees, which insure lenders against default. Guarantees affect loan prices by altering the effective marginal cost of lending but may create a moral hazard problem, weakening lenders’...

Banks guarantee international trade through letters of credit. This paper analyzes what happens to trade when the critical role of banks as trade guarantors is compromised. Using the case of the Greek capital controls in 2015, the events around which led to a massive loss of confidence in the...

How to set proper warranty lengths for different components is a common problem for manufacturers who produce end products when pricing. This study investigates a pricing game between a vertically integrated manufacturer and an exterior end-product manufacturer with the vertically integrated...

Several governments use the Credit Guarantee Schemes to ease SMEs' access to funding and support their growth and survival. This paper suggests a lending guarantee technology based on risk sharing through a de facto shareholding agreement to cover potential losses and reduce the premature...

We consider a supply chain where multiple suppliers and a manufacturer contribute to the assembly of a product (through providing components or labor). The product fails if any of its components (or elements of work) fails, but finding the faulty component can be prohibitively difficult. We...

Amid the global COVID-19 crisis, governments worldwide introduced measures to support private enterprises. This study utilizes a newly curated panel database, encompassing the financial records of firms in Peru, to investigate the impact of a substantial governmentbacked loan guarantee program,...

Following a period of rapid financial liberalization and a record credit boom in the 1980s, Sweden’s financial system suffered its worst shock in the post–World War II period. Swedish banks were heavily dependent on foreign credit, which dried up amid signs of instability. The Swedish...

On December 22, 1994, the Mexican government allowed the peso to float freely against the US dollar, aggravating the run on peso deposits, leading to the rapid devaluation of the peso, and sparking the peso crisis. The following week, the Bank of Mexico announced that the Mexican deposit insurer...

The Thai government’s decision to allow the baht to float in July 1997 was the pivotal event of the Asian Financial Crisis. The baht fell 20% by the end of the month, further pressuring Thai financial institutions that had borrowed heavily in US dollars and other foreign currencies. In early...

Korea entered the Asian Financial Crisis in August 1997 with highly leveraged firms and a banking system inexperienced in managing systemic risk. Korea faced a currency crisis and a banking crisis, as foreign banks froze credit to Korean commercial banks and merchant banks. On August 25, 1997,...

The Indonesian government closed 16 banks on November 1, 1997. At the time, the government said it would guarantee depositors up to 20 million Indonesian rupiah (IDR; USD 6,000) per account. The lack of immediate full protection for large depositors caused deposit runs throughout the banking...

Following a period of rapid financial liberalization and a record credit boom in the 1980s, Finland’s financial system suffered steadily increasing loan losses and falling earnings beginning in 1990. The Finnish Parliament created the Government Guarantee Fund (GGF) in April 1992 to support...

After a series of exogenous shocks hit the Ecuadorian economy in 1997–1998, foreign creditors reassessed their emerging-market risk and reduced external credit lines to Ecuador, thus draining liquidity. The closure of a small bank called Solbanco in April 1998 triggered deposit runs at other...

As foreign credit in Denmark dried up during the summer of 2008, Danish banks became increasingly reliant on short-term borrowing. The government took over the failing Roskilde Bank, the country’s eighth-largest bank, in late August. On October 5, 2008, the government announced a voluntary...

Banks guarantee international trade through letters of credit. This paper analyzes what happens to trade when the critical role of banks as trade guarantors is compromised. Using the case of the Greek capital controls in 2015, the events around which led to a massive loss of confidence in the...

Incidents of contracts and the obligations thereof often necessitate “survival of the fittest’ implications on consumers and vendors alike. In this regard, terms and conditions of contracts, especially for sales of goods, as provided under the law to stipulate behaviors and protect parties,...

Banks guarantee international trade through letters of credit. This paper analyzes what happens to trade when the critical role of banks as trade guarantors is compromised. Using the case of the Greek capital controls in 2015, the events around which led to a massive loss of confidence in the...

Banks guarantee international trade through letters of credit. This paper analyzes what happens to trade when the critical role of banks as trade guarantors is compromised. Using the case of the Greek capital controls in 2015, the events around which led to a massive loss of confidence in the...

This paper studies the link between government guarantees for banks and bank asset concentration. We show theoretically that these guarantees, when combined with high leverage, incentivize banks to further invest in asset classes they are already heavily exposed to: the risk-taking via asset...

We consider an entrepreneur who has an option to invest in an irreversible but delayable project. If the project is sufficiently profitable, the firm has an option to make a growth investment, which makes the project cash flow increase by a constant factor. The entrepreneur has no money to...