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Why high leverage is optimal for banks
DeAngelo, Harry; Stulz, René M. - 2013 - Rev. May 29, 2013
Liquidity production is a central function of banks. High leverage is optimal for banks in a model that has just enough …) safe/liquid debt, but no taxes or other traditional motives to lever up. Because only safe debt commands a liquidity …
Persistent link: https://www.econbiz.de/10009782420
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Is there a US high cash holdings puzzle after the financial crisis?
Pinkowitz, Lee; Stulz, René M.; Williamson, Rohan - 2013
Defining normal cash holdings as the holdings a firm with the same characteristics would have had in the late 1990s, we find that the average abnormal cash holdings of U.S. firms after the financial crisis amount to 10% of cash holdings, which represents an 87% increase in abnormal cash holdings...
Persistent link: https://www.econbiz.de/10009782423