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The government’s role in government-owned banks

Shen, Chung-Hua; Hasan, Iftekhar; Lin, Chih-Yung - Suomen Pankki - 2013

In this study, we reinvestigate the question of whether government banks are inferior to private banks. We use cross country data from 1993 to 2007 to trace the different types of government banks. These types comprise banks that acquire distressed banks, normal banks, or no banks at all....

Persistent link: https://www.econbiz.de/10010698834

99.9% – really?

Kiema, Ilkka; Jokivuolle, Esa - Suomen Pankki - 2013

The aim of the Internal Ratings Based Approach (IRBA) of Basel II was that capital suffices for unexpected losses with at least a 99.9% probability. However, because only a fraction of the required regulatory capital (a quarter to a half) had to be loss absorbing capital, the actual solvency...

Persistent link: https://www.econbiz.de/10010699286

Bonus caps, deferrals and bankers' risk-taking

Jokivuolle, Esa; Keppo, Jussi; Yuan, Xuchuan - Suomen Pankki - 2015

We model a banker's future bonuses as a series of call options on the bank's profits and show that bonus caps and deferrals reduce risk-taking. However, the banker's optimal risk-taking also depends on the costs of risk-taking. We calibrate the model to US banking data and show that lengthening...

Persistent link: https://www.econbiz.de/10011207862

The Microeconomics of Innovation: Oligopoly Theoretic Analyses with Applications to Banking and Patenting

Kauko, Karlo - Suomen Pankki - 2000

The innovation activities of companies has long been a topic of interest in economics. Game theory models of oligopoly … have since the start of the 1980s played a central role in the economics of innovation. In this study three game theory … model is used to study patenting decisions by a company that has made an innovation. A company can monopolize its innovation …

Persistent link: https://www.econbiz.de/10008774218

Ending over-lending: Assessing systemic risk with debt to cash flow

Ramsay, Bruce A.; Sarlin, Peter - Suomen Pankki - 2014

This paper operationalizes early theoretical contributions of Hyman Minsky and applies these in the context of economic sectors and nations. Following the view of boom-bust asset cycles, depicted by the endogenous build-up of risks and their abrupt unraveling, Minsky highlighted the relationship...

Persistent link: https://www.econbiz.de/10010819000

Sovereign risk, European crisis resolution policies and bond yields

Kilponen, Juha; Laakkonen, Helinä; Vilmunen, Jouko - Suomen Pankki - 2012

We study the effects of the ECB monetary policy and the European crisis resolution policies on the 10 year sovereign bond yields of seven European countries. We find that some of the decisions have had significant impact on sovereign bond yields and have succeeded in reducing stress in the...

Persistent link: https://www.econbiz.de/10011191539

Measuring financial stress – A country specific stress index for Finland

Huotari, Jarkko - Suomen Pankki - 2015

I propose a financial stress index (FSI) for the Finnish financial system that aims to reflect the functionality of the financial system and provide an aggregate measure of financial stress in the money, bond, equity and foreign exchange markets and the banking sector. The FSI is a composite...

Persistent link: https://www.econbiz.de/10011210509

Bank regulations and income inequality: Empirical evidence

Delis, Manthos D.; Hasan, Iftekhar; Kazakis, Pantelis - Suomen Pankki - 2012

This paper provides cross-country evidence that variations in bank regulatory policies result in differences in income distribution. In particular, the overall liberalization of banking systems decreases the Gini coefficient and the Theil index significantly. However, this effect fades away for...

Persistent link: https://www.econbiz.de/10010548601

Risk-based classification of financial instruments in the Finnish statutory pension scheme TyEL

Tanskanen, Antti J; Niininen, Petri; Vatanen, Kari - Suomen Pankki - 2010

Sufficient solvency of a pension insurance company responsible for defined-benefit pensions guarantees that the pensions are paid regardless of turbulence in the financial market. In the Finnish occupational pension system TyEL, the required level of solvency capital (solvency limit) and its...

Persistent link: https://www.econbiz.de/10008516093

Does State Street lead to Europe? The case of financial exchange innovations

Komulainen, Mari; Takalo, Tuomas - Suomen Pankki - 2009

We study whether and to what extent financial exchange innovations are in practice patentable in Europe. We find that exchange-related applications initially increased significantly after the State Street decision but subsequently decreased. The clear majority (65%) of applications come from the...

Persistent link: https://www.econbiz.de/10008496439