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Ex Ante Costs of Violating Absolute Priority in Bankruptcy

Bebchuk, Lucian Arye - C.E.P.R. Discussion Papers - 2001

A basic question for the design of bankruptcy law concerns whether value should be divided in accordance with absolute priority. Research done in the past decade has suggested that deviations from absolute priority have beneficial ex ante effects. In contrast, this Paper shows that ex post...

Persistent link: https://www.econbiz.de/10005656137

Institutional Investors as Minority Shareholders: Do They Matter When Ownership Is Concentrated?

Hamdani, Assaf; Yafeh, Yishay - C.E.P.R. Discussion Papers - 2010

We shed new light on the corporate governance role of institutional investors in markets where concentrated ownership and business groups are prevalent. When companies have controlling shareholders, institutional investors, as minority shareholders, can play only a limited role in corporate...

Persistent link: https://www.econbiz.de/10008554240

Control Benefits and CEO Discipline in Automatic Bankruptcy Auctions

Eckbo, B Espen; Thorburn, Karin S - C.E.P.R. Discussion Papers - 2002

We argue that the existence of CEO private control benefits complements managerial reputation in counteracting costly shareholder risk-shifting incentives during severe financial distress, when job-loss may be imminent. We examine this argument empirically using bankruptcy filings in Sweden,...

Persistent link: https://www.econbiz.de/10005123993

Credit, Wages and Bankruptcy Laws

Biais, Bruno; Mariotti, Thomas - C.E.P.R. Discussion Papers - 2003

We study the impact of different bankruptcy laws in general equilibrium, taking into account the interactions between the credit and labour markets, as well as wealth heterogeneity. Soft bankruptcy laws often preclude liquidation, to avoid ex-post inefficiencies. This worsens credit rationing,...

Persistent link: https://www.econbiz.de/10005498012

Of Religion and Redemption: Evidence from Default on Islamic Loans

Baele, Lieven; Farooq, Moazzam; Ongena, Steven - C.E.P.R. Discussion Papers - 2011

combinations of time-varying borrower, loan contract and bank characteristics, and time, borrower, bank and borrower*bank fixed … effects. For the same borrower taking both conventional and Islamic loans from the same bank, the hazard rate on Islamic loans …

Persistent link: https://www.econbiz.de/10009209832

A DSGE model of banks and financial intermediation with default risk

Wickens, Michael R. - C.E.P.R. Discussion Papers - 2011

This paper takes the view that a major contributing factor to the financial crisis of 2008 was a failure to correctly assess and price the risk of default. In order to analyse default risk in the macroeconomy, a simple general equilibrium model with banks and financial intermediation is...

Persistent link: https://www.econbiz.de/10009293986

Leverage and Asset Bubbles: Averting Armageddon with Chapter 11?

Miller, Marcus; Stiglitz, Joseph E - C.E.P.R. Discussion Papers - 2009

An iconic model with high leverage and overvalued collateral assets is used to illustrate the amplification mechanism driving asset prices to ‘overshoot’ equilibrium when an asset bubble bursts - threatening widespread insolvency and what Richard Koo calls a ‘balance sheet recession’....

Persistent link: https://www.econbiz.de/10008528524

Rollover Risk and Market Freezes

Acharya, Viral V; Gale, Douglas M; Yorulmazer, Tanju - C.E.P.R. Discussion Papers - 2009

We consider the debt capacity of a risky asset when debt is being rolled over and there is a liquidation cost in case of default. We show that debt capacity depends on how information about the quality of the asset is revealed. When the information structure is based on “optimistic”...

Persistent link: https://www.econbiz.de/10004980204

Banking Passivity and Regulatory Failure in Emerging Markets: Theory and Evidence from the Czech Republic

Hanousek, Jan; Roland, Gérard - C.E.P.R. Discussion Papers - 2002

We present a model of bank passivity and regulatory failure. Banks with low equity positions have more incentives to be … rates may act as an early warning signal of bank failure. We provide empirical evidence that the balance sheet information … collected by the Czech National Bank is not a better predictor of bank failure than higher deposit rates. This confirms the …

Persistent link: https://www.econbiz.de/10005123959

Corporate Debt Restructuring: Evidence on Lending Coordination in Financial Distress

Brunner, Antje; Krahnen, Jan Pieter - C.E.P.R. Discussion Papers - 2001

We analyse the coordination problem in multi-creditor relationships empirically, relying on a unique panel data set that contains detailed credit-file information on distressed lending relationships in Germany, including information on creditor pools, a legal institution aiming at coordinating...

Persistent link: https://www.econbiz.de/10005123994

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