Financial market interdependence has been at the epicenter of the crisis in the euro area. This paper tests for the existence of financial contagion during this crisis, defined as the international transmission of country-specific shocks beyond the normal channels of financial interdependence....

In a credit market, a low-cost foreign entrant is likely less informed than a domestic bank with information endowments. We present a steady-state model in an infinite-period framework, and analyze how the informational asymmetry affects the lending equilibrium and the foreign banks’ entry...

Given the dominant role the U.S. economy plays in global trade, we explore how U.S. macroeconomic surprises affect stock markets in ten major developed economies as well as in China and India. We do not find strong enough evidence to conclude that U.S. macro shocks materially and consistently...

Using small business data, we investigate the relationship between bank loan availability and trade credit in Japan during the recent global financial crisis. Previous studies argue that the relationship between trade payables and bank loan availability is negative because trade credit is an...

We develop a quantitative model for structured microfinance instruments, which are regarded as an important means for refinancing microfinance institutions. The quantitative credit risk model presented takes into account the peculiarities of microfinance institutions and can be used for pricing...

This paper examines the relation between bank charter value and risk taking. Using a sample of U.S. banks over the period 1990–2006, we find that the relation is U-shaped: as charter value increases, risk taking first decreases and then increases. This finding is robust across alternative...

Derivative markets have exploded over the last decade, remained active in the midst of the 2007–2009 financial crisis and continue to be dominated by a small group of bank holding companies (BHC). BHC motives for derivative usage are usually tied to hedging purposes (balance sheet risk...

Given the worldwide economic importance of bank loan financing, we empirically investigate the roles of borrowers’ ownership and board structure in bank loan terms through a comprehensive dataset, which includes the complete history of individual bank loan contracts for firms publicly listed...

The issue of surplus distribution has hardly been analyzed in the context of the social economy. This paper highlights the main drivers of distribution between various stakeholders of microfinance institutions (MFIs), which are an example of social enterprises. We focus on three major variables:...

Discussions of systemic risk after the financial crisis of 2007–09 have focused heavily on so-called “systemically important financial institutions” (SIFIs) a cohort of financial firms that is almost exclusively (but not necessarily) comprised of large, complex and heavily interconnected...