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Using Bankruptcy to Reduce Foreclosures: Does Strip-down of Mortgages Affect the Supply of Mortgage Credit?

Li, Wenli; Tewari, Ishani; White, Michelle - CESifo - 2014

We assess the credit market impact of allowing mortgage “strip-down” as a foreclosure-prevention measure, where strip …-term reduction in mortgage interest rates and a small, short-term increase in mortgage approval rates, but no long-term effects, and … the circuit court decisions did not consistently affect mortgage terms. These results suggest that strip-down would be an …

Persistent link: https://www.econbiz.de/10010877889

Optimal Risk-Sharing in Mortgage Contracts: The Effects of Potential Prepayment and Default

Brueckner, Jan K.; Lee, Kangoh - CESifo - 2014

Much of the literature on the economics of mortgage markets has studied the FRM-ARM choice made by individual borrowers … of optimal risk-sharing in mortgage contracts. But since only a small literature has studied this question, more research …’s (1986a) model, using it to characterize optimal contracts in the absence of mortgage termination, and then exploring how …

Persistent link: https://www.econbiz.de/10010948814

Iceland: How Could This Happen?

Gylfason, Thorvaldur - CESifo - 2014

This paper reviews economic developments in Iceland following its financial collapse in 2008, focusing on causes and consequences of the crash. The review is presented in the context of the Nordic region, with broad comparisons also with developments elsewhere on the periphery of Europe, in...

Persistent link: https://www.econbiz.de/10010877635

Gold, Oil, and Stocks: Dynamic Correlations

Baruník, Jozef; Kocenda, Evžen; Vácha, Lukáš - CESifo - 2015

We employ a wavelet approach and conduct a time-frequency analysis of dynamic correlations between pairs of key traded assets (gold, oil, and stocks) covering the period from 1987 to 2012. The analysis is performed on both intra-day and daily data. We show that heterogeneity in correlations...

Persistent link: https://www.econbiz.de/10011272625

The Impact of the Global Financial Crisis on Business Cycles in Asian Emerging Economies

Fidrmuc, Jarko; Korhonen, Iikka - CESifo - 2009

We analyze the transmission of global financial crisis to business cycles in China and India. The pattern of business …

Persistent link: https://www.econbiz.de/10005013072

The Crisis in the Foreign Exchange Market

Melvin, Michael; Taylor, Mark P. - CESifo - 2009

The financial crisis of 2007-2008 had major implications for the foreign exchange market. We review events and implications for exchange rates, volatility, returns to currency investing, and transaction costs. This “blow-by-blow” narrative is intended to be a resource for researchers seeking...

Persistent link: https://www.econbiz.de/10005013075

Debt Sustainability and Financial Crises: Evidence from the GIIPS

Legrenzi, Gabriella Deborah; Milas, Costas - CESifo - 2011

We assess the sustainability of the public finances of Greece, Ireland, Italy, Portugal and Spain (GIIPS), allowing for possible non-linearities in the form of threshold behaviour of the fiscal authorities. We provide some evidence of fiscal sustainability when debt gets “too high” relative...

Persistent link: https://www.econbiz.de/10009320775

Government Guarantees and Bank Risk Taking Incentives

Fischer, Markus; Hainz, Christa; Rocholl, Jörg; … - CESifo - 2014

This paper analyzes the effect of the removal of government guarantees on bank risk taking. We exploit the removal of guarantees for German Landesbanken which results in lower credit ratings, higher funding costs, and a loss in franchise value. This removal was announced in 2001, but...

Persistent link: https://www.econbiz.de/10010752789

Monetary Policies of Large Industrialised Countries, Emerging Market Credit Cycles and Feedback Effects

Hoffmann, Andreas; Schnabl, Gunther - CESifo - 2014

This paper explores the link between monetary policies of large industrial countries and international credit cycles. Based on an overinvestment framework, we show that in the prevailing asymmetric world monetary system, monetary policies of large centre countries can fuel credit booms in...

Persistent link: https://www.econbiz.de/10010756160

Escaping from a Combination of Liquidity Trap and Credit Crunch

Heinemann, Frank - CESifo - 2008

This brief exposition suggests that the Federal Reserve System temporarily guarantee a lower bound on stock prices in order to escape the current combination of liquidity trap and credit crunch. It shortly discusses reasons for this measure, consequences, and some alternatives. It is meant as a...

Persistent link: https://www.econbiz.de/10005765775