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Resolving Debt Overhang: Political Constraints in the Aftermath of Financial Crises
Mian, Atif; Sufi, Amir; Trebbi, Francesco - National Bureau of Economic Research (NBER) - 2012
Debtors bear the brunt of a decline in asset prices associated with financial crises and policies aimed at partial debt relief may be warranted to boost growth in the midst of crises. Drawing on the US experience during the Great Recession of 2008-09 and historical evidence in a large panel of...
Persistent link: https://www.econbiz.de/10009652773
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Saving Your Home in Chapter 13 Bankruptcy
White, Michelle J.; Zhu, Ning - National Bureau of Economic Research (NBER) - 2008
This paper examines how filing for bankruptcy under Chapter 13 helps financially distressed debtors save their homes. We develop a model of debtors' decisions to default on their mortgages and file for bankruptcy under Chapter 13 and evaluate the model using new data on Chapter 13 bankruptcy...
Persistent link: https://www.econbiz.de/10005778894
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Efficient Recapitalization
PHILIPPON, Thomas; Schnabl, Philipp - National Bureau of Economic Research (NBER) - 2009
conditions implementation on sufficient bank participation. Preferred stock plus warrants reduces opportunistic participation by … aggregate credit risk exceed the cost of implicit transfers to bank debt holders. …
Persistent link: https://www.econbiz.de/10005000616
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Moral and Social Constraints to Strategic Default on Mortgages
Guiso, Luigi; Sapienza, Paola; Zingales, Luigi - National Bureau of Economic Research (NBER) - 2009
We use survey data to study American households' propensity to default when the value of their mortgage exceeds the value of their house even if they can afford to pay their mortgage (strategic default). We find that 26% of the existing defaults are strategic. We also find that no household...
Persistent link: https://www.econbiz.de/10005039683
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An Empirical Model of Subprime Mortgage Default From 2000 to 2007
Bajari, Patrick; Chu, Chenghuan Sean; Park, Minjung - National Bureau of Economic Research (NBER) - 2008
The turmoil that started with increased defaults in the subprime mortgage market has generated instability in the financial system around the world. To better understand the root causes of this financial instability, we quantify the relative importance of various drivers behind subprime...
Persistent link: https://www.econbiz.de/10005718415
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Repo and Securities Lending
Martin, Antoine; Adrian, Tobias; Begalle, Brian; … - National Bureau of Economic Research (NBER) - 2012
We provide an overview of the data required to monitor repo and securities lending markets for the purposes of informing policymakers and researchers about firm-level and systemic risk. We start by explaining the functioning of these markets and argue that it is crucial to understand the...
Persistent link: https://www.econbiz.de/10010969450
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Adverse Selection, Reputation and Sudden Collapses in Secondary Loan Markets
Chari, Varadarajan; Shourideh, Ali; Zetlin-Jones, Ariel - National Bureau of Economic Research (NBER) - 2010
Banks and financial intermediaries that originate loans often sell some of these loans or securitize them in secondary loan markets and hold on to others. New issuances in such secondary markets collapse abruptly on occasion, typically when collateral values used to secure the underlying loans...
Persistent link: https://www.econbiz.de/10008634714
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When Does Libertarian Paternalism Work?
Gervais, Simon; Carlin, Bruce Ian; Manso, Gustavo - National Bureau of Economic Research (NBER) - 2009
We develop a theoretical model to study the effects of libertarian paternalism on knowledge acquisition and social learning. Individuals in our model are permitted to appreciate and use the information content in the default options set by the government. We show that in some settings...
Persistent link: https://www.econbiz.de/10005040653
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Will the U.S. Bank Recapitalization Succeed? Eight Lessons from Japan
Hoshi, Takeo; Kashyap, Anil - National Bureau of Economic Research (NBER) - 2008
During the financial crisis that started in 2007, the U.S. government has used a variety of tools to try to rehabilitate the U.S. banking industry. Many of those strategies were used also in Japan to combat its banking problems in the 1990s. There are also a surprising number of other...
Persistent link: https://www.econbiz.de/10005037672
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Financing as a Supply Chain: The Capital Structure of Banks and Borrowers
Gornall, William; Strebulaev, Ilya A. - National Bureau of Economic Research (NBER) - 2013
We develop a model of the joint capital structure decisions of banks and their borrowers. Strikingly high bank leverage … emerges naturally from the interplay between two sets of forces. First, seniority and diversification reduce bank asset … underlie our structural model, we can quantify the impact capital regulation and other government interventions have on bank …
Persistent link: https://www.econbiz.de/10010711816