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What Went Wrong? : The Puerto Rican Debt Crisis, the 'Treasury Put,' and the Failure of Market Discipline

Chirinko, Robert S. - 2019

What went wrong? Why did seemingly rational bond investors continue to purchase Puerto Rican debt with only a modest risk premium, even though the macroeconomic fundamentals were dismal? Why did financial markets fail to exercise market discipline and restrict capital flows to Puerto Rico? Given...

Persistent link: https://www.econbiz.de/10012890192

Changing forces of gravity : how the crisis affected international banking

Buch, Claudia M.; Neugebauer, Katja; Schröder, Christoph - 2013

The global financial crisis has brought to an end a rather unprecedented period of banks’ international expansion. We analyze the effects of the crisis on international banking. Using a detailed dataset on the international assets of all German banks with foreign affiliates for the years...

Persistent link: https://www.econbiz.de/10010211966

Drivers of systemic risk : do national and European perspectives differ?

Buch, Claudia M.; Krause, Thomas; Tonzer, Lena - 2017

when applying a national versus a European perspective. We use market data for 80 listed euro-area banks to measure each … bank's contribution to systemic risk (SRISK) at the national and the euro-area level. Our research delivers three main … national and the euro-area level is not very large, but there is considerable heterogeneity across countries and banks. Second …

Persistent link: https://www.econbiz.de/10011640989

Fundamentals, misvaluation, and investment: the real story

Chirinko, Robert S.; Schaller, Huntley - 2007

Is real investment fully determined by fundamentals or is it sometimes affected by stock market misvaluation? We introduce three new tests that: measure the reaction of investment to sales shocks for firms that may be overvalued; use Fama-MacBeth regressions to determine whether overinvestment...

Persistent link: https://www.econbiz.de/10010264073

The irreversibility premium

Chirinko, Robert S.; Schaller, Huntley - 2008

When investment is irreversible, theory suggests that firms will be "reluctant to invest." This reluctance creates a wedge between the discount rate guiding investment decisions and the standard Jorgensonian user cost (adjusted for risk). We use the intertemporal tradeoff between the benefits...

Persistent link: https://www.econbiz.de/10010264335

In search for yield? New survey-based evidence on bank risk taking

Buch, Claudia M.; Eickmeier, Sandra; Prieto, Esteban - 2011

There is growing consensus that the conduct of monetary policy can have an impact on financial and economic stability through the risk-taking incentives of banks. Falling interest rates might induce a 'search for yield' and generate incentives to invest into risky activities. This paper provides...

Persistent link: https://www.econbiz.de/10010274819

Macroeconomic factors and micro-level bank risk

Buch, Claudia M.; Eickmeier, Sandra; Prieto, Esteban - 2010

The interplay between banks and the macroeconomy is of key importance for financial and economic stability. We analyze this link using a factor-augmented vector autoregressive model (FAVAR) which extends a standard VAR for the U.S. macroeconomy. The model includes GDP growth, inflation, the...

Persistent link: https://www.econbiz.de/10010274932