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Protection for Whom? Creditor Conflicts in Bankruptcy.

Longhofer, S.D.; Peters, S.R. - London School of Economics (LSE) - 1999

In this article we provide a rationale for bankruptcy law that is based on the conflicts among creditors that occur when a debtor's iabilities exceed its assets. In the absence of a bankruptcy law, the private debt-collection remedies that creditors pursue when a debtor is insolvent result in an...

Persistent link: https://www.econbiz.de/10005776293

Recovery rates, default probabilities and the credit cycle

Bruche, Max; Gonzalez-Aguado, Carlos - London School of Economics (LSE) - 2006

Recovery rates are negatively related to default probabilities (Altman et al., 2005). This paper proposes and estimates a model in which this dependence is the result of an unobserved credit cycle: When times are bad, the default probability is high and recovery rates are low; when times are...

Persistent link: https://www.econbiz.de/10010746498

Capital structure, investment, and fire sales

Gale, Douglas; Gottardi, Piero - London School of Economics (LSE) - 2014

We study a dynamic general equilibrium model in which firms choose their investment level and their capital structure, trading off the tax advantages of debt against the risk of costly default. The costs of bankruptcy are endogenously determined, as bankrupt firms are forced to liquidate their...

Persistent link: https://www.econbiz.de/10011170093

How to sell a (bankrupt) company?

Cornelli, Francesca; Felli, Leonardo - London School of Economics (LSE) - 2010

The restructuring of a bankrupt company often entails the sale of such company. This paper suggests a way to sell the company that maximizes the creditors’ proceeds. The key to this proposal is the option left to the creditors to retain a fraction of the shares of the company. Indeed, by...

Persistent link: https://www.econbiz.de/10011071365

How to lose money in derivatives: examples from hedge funds and bank trading departments

Ziemba, Bill; Lleo, Sebastien - London School of Economics (LSE) - 2014

What makes futures hedge funds fail? The common ingredient is over betting and not being diversified in some bad scenarios that can lead to disaster. Once troubles arise, it is difficult to take the necessary actions that eliminate the problem. Moreover, many hedge fund operators tend not to...

Persistent link: https://www.econbiz.de/10011201256

Systems and systemic risk in finance and economics

Zigrand, Jean-Pierre - London School of Economics (LSE) - 2014

This paper examines the concept of systemic risk and provides an intuitive account of the economic thought on systems and the development of the notion of systemic risk. It is illustrated by putting the ideas of system, systemic risk and endogenous risk in a historial perspective.

Persistent link: https://www.econbiz.de/10011201257

Public opinion and the crisis: the dynamics of support for the euro

Hobolt, Sara B.; Wratil, Christopher - London School of Economics (LSE) - 2015

Further integration in the European Union (EU) increasingly depends on public legitimacy. The global financial crisis … and the subsequent euro area crisis have amplified both the salience and the redistributive consequences of decisions … contribution, we examine how public opinion has responded to the crisis, focusing on support for monetary integration …

Persistent link: https://www.econbiz.de/10011265670

The lifecycle of the financial sector and other speculative industries

Biais, Bruno; Rochet, Jean-Charles; Woolley, Paul - London School of Economics (LSE) - 2009

fragile, eventually there is a crisis, and the industry shrinks. Our model thus captures important stylized facts of the …

Persistent link: https://www.econbiz.de/10010744809

Institutional change in Greek industrial relations in an era of fiscal crisis

Voskeritsian, Horen; Kornelakis, Andreas - London School of Economics (LSE) - 2011

The main aim of this paper is to contribute to the ongoing debate on the facets of the Greek crisis via an analysis of …

Persistent link: https://www.econbiz.de/10010744857

Do economic crises lead to health and nutrition behavior responses?: analysis using longitudinal data from Russia

Nikoloski, Zlatko; Ajwad, Mohamed Ihsan - London School of Economics (LSE) - 2013

estimates the impact of the 2009 global financial crisis on food expenditures, health care expenditures, and doctor visits in … between households that were crisis-affected and households that were not affected by the crisis. However the analysis finds … that crisis-affected poor families curtailed their out-of-pocket health expenditures during and after the crisis more than …

Persistent link: https://www.econbiz.de/10010746251