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Efficient Recapitalization
Philippon, Thomas; Schnabl, Philipp - C.E.P.R. Discussion Papers - 2009
We analyze public interventions to alleviate debt overhang among private firms when the government has limited information and limited resources. We compare the efficiency of buying equity, purchasing existing assets, and providing debt guarantees. With symmetric information, all the...
Persistent link: https://www.econbiz.de/10008577813
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Too Many to Fail - An Analysis of Time Inconsistency in Bank Closure Policies
Acharya, Viral V; Yorulmazer, Tanju - C.E.P.R. Discussion Papers - 2004
This Paper shows that bank closure policies suffer from a ‘too-many-to-fail’ problem: when the number of bank failures is large, the regulator finds it ex-post optimal to bail out some or all failed banks, whereas when the number of bank failures is small, failed banks can be acquired by the...
Persistent link: https://www.econbiz.de/10005136753
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Bailouts And Moral Hazard: How Implicit Government Guarantees Affect Financial Stability
Mariathasan, Mike; Merrouche, Ouarda; Werger, Charlotte - C.E.P.R. Discussion Papers - 2014
The recent crisis has shown that banks in distress can often expect to benefit from (implicit) government guarantees. This paper analyzes a panel of 781 banks from 90 countries to test whether the expectation of individual and systemic government support induces moral hazard. It shows that banks...
Persistent link: https://www.econbiz.de/10011145454
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Feeling the blues. Moral hazard and debt dilution in Eurobonds before 1914
Esteves, Rui; Tuncer, Ali Coskun - C.E.P.R. Discussion Papers - 2014
Debt mutualisation through Eurobonds has been proposed as a solution to the Euro crisis. Although this proposal found … debt and promoting moral hazard by weak countries. Because Eurobonds are a new addition to the policy toolkit, there are … some tests of the issues by drawing from the closest historical parallel—five guaranteed bonds issued in Europe between …
Persistent link: https://www.econbiz.de/10011084064
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Sovereign Debt and Structural Reforms
Müller, Andreas; Storesletten, Kjetil; Zilibotti, Fabrizio - C.E.P.R. Discussion Papers - 2015
Motivated the European debt crisis, we construct a tractable theory of sovereign debt and structural reforms under limited commitment. The government of a sovereign country which has fallen into a recession of an uncertain duration issues one-period debt and can renege on its obligations by...
Persistent link: https://www.econbiz.de/10011276380
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Does the European Financial Stability Facility bail out sovereigns or banks? An event study
Horvath, Balint; Huizinga, Harry - C.E.P.R. Discussion Papers - 2011
southern Europe and Ireland and located in countries characterized by weak public finances. Furthermore, countries with weak … public finances and banking systems heavily exposed to southern Europe and Ireland benefited, as evidenced by lower sovereign …
Persistent link: https://www.econbiz.de/10009365641
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Optimal Interventions in Markets with Adverse Selection
Philippon, Thomas; Skreta, Vasiliki - C.E.P.R. Discussion Papers - 2010
We study interventions to restore efficient lending and investment when financial markets fail because of adverse selection. We solve a design problem where the decision to participate in a program offered by the government can be a signal for private information. We charac terize optimal...
Persistent link: https://www.econbiz.de/10008468692
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Bank Solvency, Market Structure, and Monitoring Incentives
Caminal, Ramon; Matutes, Carmen - C.E.P.R. Discussion Papers - 1997
We analyse the impact of market structure on the probability of banking failure when banks’ loan portfolios are subject to aggregate uncertainty. In our model borrowers are subject to a moral hazard problem, which induces banks to choose between two second-best alternative devices: costly...
Persistent link: https://www.econbiz.de/10005662062
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An Empirical Investigation of Gaming Responses to Explicit Performance Incentives
Courty, Pascal; Marschke, Gerald - C.E.P.R. Discussion Papers - 2002
This Paper studies a particular kind of gaming response to explicit incentives in a large government organization. The gaming responses we consider occur when agents strategically report their performance outcomes to maximize their awards. An important contribution of this work is to examine...
Persistent link: https://www.econbiz.de/10005662347
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Tax Policy, Venture Capital and Entrepreneurship
Keuschnigg, Christian; Nielsen, Soren Bo - C.E.P.R. Discussion Papers - 2000
The Paper studies the effects of tax policy on venture capital activity. Entrepreneurs pursue a single high-risk project each but have no own resources. Financiers provide equity finance. They must structure the entrepreneur’s profit share and base salary to assure their incentives for full...
Persistent link: https://www.econbiz.de/10005666436