Showing 1 - 5 of 5
The paper revisits and qualifies existing insights on security design. A rich literature argues that tranching creates debt-like instruments that are robust to adverse selection or discourage wasteful information acquisition. Yet, for a given information structure, while tranching confines and...
Persistent link: https://www.econbiz.de/10010852313
This paper analyzes the possibility and the consequences of asset price overvaluation in a dynamic economy where financially constrained firms demand and supply liquidity. Bubbles are more likely to emerge, the scarcer the supply of outside liquidity and the more limited the pledgeability of...
Persistent link: https://www.econbiz.de/10008594386
Persistent link: https://www.econbiz.de/10005767488
The paper elicits a mechanism by which private leverage choices exhibit strategic complementarities through the reaction of monetary policy. When everyone engages in maturity transformation, authorities haver little choice but facilitating refinancing. In turn, refusing to adopt a risky balance...
Persistent link: https://www.econbiz.de/10008540632
Persistent link: https://www.econbiz.de/10005635852