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Can firms learn by observing? Evidence from cross-border M&As

Francis, Bill B.; Hasan, Iftekhar; Sun, Xian; Waisman, Maya - Suomen Pankki - 2014

In the presence of high uncertainty and limited experience, can observing the actions of other acquiring predecessors help firms make better acquisition decisions? Using a sample of cross-border M&As conducted by US acquirers in developing countries, we document a positive and significant...

Persistent link: https://www.econbiz.de/10010945113

The risk of financial intermediaries

Delis, Manthos D.; Hasan, Iftekhar; Tsionas, Efthymios G. - Suomen Pankki - 2014

This paper reconsiders the formal estimation of bank risk using the variability of the profit function. In our model, point estimates of the variability of profits are derived from a model where this variability is endogenous to other bank characteristics, such as capital and liquidity. We...

Persistent link: https://www.econbiz.de/10010945115

Equilibrium unemployment with credit and labour market imperfections

Koskela, Erkki; Stenbacka, Rune - Suomen Pankki - 2001

We study the role of labour and credit market imperfections in the determination of equilibrium unemployment. In the credit market, loan contracts are negotiated between financiers and firms, both of which have bargaining power, while firms and organized labour bargain over the base wage. The...

Persistent link: https://www.econbiz.de/10005207138

Simulation-based stress testing of banks’ regulatory capital adequacy

Peura, Samu; Jokivuolle, Esa - Suomen Pankki - 2003

Banks’ holding of reasonable capital buffers in excess of minimum requirements could alleviate the procyclicality problem potentially exacerbated by the rating-sensitive capital charges of Basel II. Determining the required buffer size is an important risk management issue for banks, which the...

Persistent link: https://www.econbiz.de/10005207153

Rating targeting and the confidence levels implicit in bank capital

Jokivuolle, Esa; Peura, Samu - Suomen Pankki - 2006

The solvency standards implicit in bank capital levels, as reported eg in Jackson et al (2002), are much higher than those required for top ratings, if standard single period economic capital models are taken se-riously. We explain this excess capital puzzle by forward looking rating targeting...

Persistent link: https://www.econbiz.de/10005207164

Leverage and growth: effect of stock options

Francis, Bill; Hasan, Iftekhar; Sharma, Zenu - Suomen Pankki - 2011

firm’s growth or, alternatively, on its leverage-growth relationship. To structure the analysis addressing this issue, the … paper utilizes a framework establishing a negative relationship between leverage and the firm’s growth. However, in contrast … relationship between leverage and growth has changed significantly. Primarily this paper documents that, as options based …

Persistent link: https://www.econbiz.de/10009358948

Asymmetric benchmarking in bank credit rating

Shen, Chung-Hua; Huang, Yu-Li; Hasan, Iftekhar - Suomen Pankki - 2012

This study proposes an information asymmetry hypothesis to examine why bank credit ratings vary among countries even when bank financial ratios remain constant. Countries are divided among those with low and high information asymmetry. The former include high-income countries, those in North...

Persistent link: https://www.econbiz.de/10010548599

Bank relationships and firms’ financial performance: the Italian experience

Castelli, Annalisa; Dwyer, Gerald P; Hasan, Iftekhar - Suomen Pankki - 2009

We examine the connection between the number of bank relationships and firms’ performance using a unique data set on Italian small firms for which banks are a major source of financing. Our evidence indicates that return on equity and return on assets decrease as the number of bank...

Persistent link: https://www.econbiz.de/10008502565

Transmission of macro shocks to loan losses in a deep crisis: the case of Finland

Jokivuolle, Esa; Viren, Matti; Vähämaa, Oskari - Suomen Pankki - 2009

Building on the work of Sorge and Virolainen (2006), we revisit the data on aggregate Finnish bank loan losses from the corporate sector, which covers the ‘Big Five’ crisis in Finland in the early 1990s. Several extensions to the empirical model are considered. These extensions are then used...

Persistent link: https://www.econbiz.de/10008509434

The determinants of option-adjusted delta credit spreads: a comparative analysis of the United States, the United Kingdom and the euro area

Becchetti, Leonardo; Carpentieri, Andrea; Hasan, Iftekhar - Suomen Pankki - 2009

We analyse the determinants of the variation of option-adjusted credit spreads (OASs) on a unique database that enlarges the traditional scope of analysis to more disaggregated indexes (combining industry, grade and maturity levels), new variables (volumes of sales and purchases of institutional...

Persistent link: https://www.econbiz.de/10008509440