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Earnings baths by bank CEOs during turnovers

Bornemann, Sven; Pfingsten, Andreas; Kick, Thomas; … - Deutsche Bundesbank - 2014

This study investigates the development of income-decreasing discretionary expenses surrounding CEO turnovers at banks. We expect incoming CEOs to take an earnings bath during the initial stage of their tenure. For a sample of German banks over the period 1993-2012, we document that (1) incoming...

Persistent link: https://www.econbiz.de/10010957116

Are banks using hidden reserves to beat earnings benchmarks? Evidence from Germany

Bornemann, Sven; Kick, Thomas; Memmel, Christoph; … - Deutsche Bundesbank - 2010

Section 340f of the German Commercial Code allows banks to provision against the special risks inherent to the banking business by building hidden reserves. Beyond risk provisioning, these reserves are implicitly accepted as an earnings management device. By analyzing financial statements of...

Persistent link: https://www.econbiz.de/10008833258

Loan loss provisioning and procyclicality: Evidence from an expected loss model

Domikowsky, Christian; Bornemann, Sven; Duellmann, Klaus; … - Deutsche Bundesbank - 2014

Several studies have addressed, with conflicting results, the issue of procyclical effects of loan loss provisions in the past. More recently, the weak performance of incurred loss models in the financial crisis has given rise to a new debate on the sound design of credit risk provisioning...

Persistent link: https://www.econbiz.de/10011124453

An information economics perspective on main bank relationships and firm R&D

Hoewer, Daniel; Schmidt, Tobias; Sofka, Wolfgang - Deutsche Bundesbank - 2011

Information economics has emerged as the primary theoretical lens for framing financing decisions in firm R&D investment. Successful outcomes of R&D projects are either ex-ante impossible to predict or the information is asymmetrically distributed between inventors and investors. As a result,...

Persistent link: https://www.econbiz.de/10009323613

Cross-border liquidity, relationships and monetary policy: Evidence from the Euro area interbank crisis

Abbassi, Puriya; Bräuning, Falk; Fecht, Falko; … - Deutsche Bundesbank - 2014

We analyze the impact of financial crises and monetary policy on the supply of wholesale funding liquidity, and also on … on interbank access and volume is stronger than on spreads. Liquidity supply restrictions are exacerbated for cross … price dispersion substantially decreases when the Eurosystem promises unlimited access to liquidity at a fixed price in …

Persistent link: https://www.econbiz.de/10011161234

How stressed are banks in the interbank market?

Abbassi, Puriya; Fecht, Falko; Weber, Patrick - Deutsche Bundesbank - 2013

recourse to the LOLR facility (a) to derive banks' willingness-to-pay for liquidity through a one-week repo and (b) to show … results suggest (i) that banks' willingness-to-pay for liquidity indeed reflects refinancing conditions in the interbank …

Persistent link: https://www.econbiz.de/10010957097

International banking and liquidity risk transmission: Lessons from across countries

Buch, Claudia M.; Goldberg, Linda - Deutsche Bundesbank - 2014

financial crisis. Yet, we know little about the actual magnitudes and mechanisms for transmission of liquidity shocks through … studies conducted in 11 countries to explore liquidity risk transmission. Among the main results is, first, that explanatory … power of the empirical model is higher for domestic lending than for international lending. Second, how liquidity risk …

Persistent link: https://www.econbiz.de/10010957099

An affine multifactor model with macro factors for the German term structure: Changing results during the recent crises

Halberstadt, Arne; Stapf, Jelena - Deutsche Bundesbank - 2012

less at the short end as compared to longer maturities in times of crisis. A liquidity stress factor included in the macro …

Persistent link: https://www.econbiz.de/10010957117

A network analysis of the evolution of the German interbank market

Roukny, Tarik; Georg, Co-Pierre; Battiston, Stefano - Deutsche Bundesbank - 2014

-the-counter markets for liquidity in Germany: the interbank market for credit and for derivatives. We use end-of-quarter data from the …

Persistent link: https://www.econbiz.de/10010957124

Maturity shortening and market failure

Thierfelder, Felix - Deutsche Bundesbank - 2012

Motivated by the financial crisis of 2007-2009 several papers have provided explanations for why liquidity may dry up … during market stress. This paper also looks at this issue but focuses on the question as to why the liquidity crunch was not … need to provide longer-term liquidity. The paper asks what market failure central banks were addressing by intervening and …

Persistent link: https://www.econbiz.de/10010957159