This study aims to explain causal relationships between the two dramatic cycles observed in the U.S. during the recent financial crisis - the mortgage credit cycle and the home price cycle. In the viewpoint of mortgage lending, the main demand-side driver for the observed credit concentration...

The objective of this study is two-fold: first, to conceptualize key causal relationships between housing price cycle and mortgage credit cycle based on relevant literature and, second, to present cases of two countries - Korea and the U.S. - in terms of evolution of, and recent milestone events...

In this paper, a law reform is evaluated that aimed at improving the corporate governance of German savings banks by tightening accountability and legal liability of outside directors. The causal effect of this reform on bank risk is identified by difference-in-differences and triple differences...

The purpose of this paper is to investigate whether a credit crunch occurred in Germany during the recent financial crisis and to analyze the underlying factors. In order to disentangle credit supply and demand we specify a theory-based dynamic disequilibrium model of the German credit market....

This study puts the monetary transmission process in the eurozone between 2003 and 2011 under closer scrutiny. For this purpose, we investigate the interest rate pass-through from money market to various loan rates for up to twelve countries of the European Monetary Union. Applying different...

In a relatively recent paper, Gehrig and Stenbacka (Eur Econ Rev 51, 77-99, 2007) show that information sharing increases banks’ profits to the detriment of creditworthy entrepreneurs in a model of a banking duopoly with switching costs and poaching. They restrict their analysis to the case in...

We propose a spatial competition model to study banks’ strategic responses to the asymmetric Spanish geographic deregulation process. We find that once the geographic deregulation process finishes, inter-regional mergers between savings banks are optimal whenever the economies of scale...

For nearly two years, the two of us have had a running discussion of the costs and benefits of automatic stays in bankruptcy for qualified financial contracts (QFCs) such as derivatives and repurchase agreements, particularly those held by systemically important major dealer banks. Under current...

This submission discusses implications for the quality and safety of financial markets of proposed rules implementing the market-making provisions of section 13 of the Bank Holding Company Act, commonly known as the “Volcker Rule.” The proposed rules1 have been described by the Office of the...

I explain the key failure mechanics of large dealer banks, and some policy implications. This is not a review of the Financial crisis of 2007-2009. Systemic risk is considered only in passing. Both the Financial crisis and the systemic importance of large dealer banks are nevertheless obvious...