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There are, at least, seven aspects relating to financial regulation where the recent, and still current, financial … regimes, also known as prompt corrective action'; 3. Money market operations by Central Banks; 4. Commercial bank liquidity …-cyclical instruments; 6. Boundaries of regulation, conduits, SIVs and reputational risk; 7. Crisis management:- (a) domestic, within …
Persistent link: https://www.econbiz.de/10010264328
When agents are liquidity constrained, two options exist - sell assets or borrow. We compare the allocations arising in …
Persistent link: https://www.econbiz.de/10010277131
We use data from a German online brokerage and a survey to show that retail investors sharply reduce risk-taking in response to nearby firm bankruptcies, which are not predictive of returns. The effects on trading are spatially highly concentrated, immediate and not persistent. They seem to...
Persistent link: https://www.econbiz.de/10012837679
We develop a model of rational bubbles based on leverage and the assumption of an imprecisely known maximum market size. In a bubble, traders push the asset price above its fundamental value in a dynamic way, driven by rational expectations about future price developments. At a previously...
Persistent link: https://www.econbiz.de/10011794145
relation between IR and MR is highly stable through time and is robust across exchanges, firm size, liquidity, and market …-to-book groupings. Though stock liquidity affects the strength of the relation, it is strong for the most liquid stocks. The relation …
Persistent link: https://www.econbiz.de/10011698727
Cryptocurrencies are often thought to operate out of the reach of national regulation, but in fact their valuations …
Persistent link: https://www.econbiz.de/10012836205
stablecoin issuers raises the challenge of how to apply technology-neutral regulation so that similar risks are subject to the …
Persistent link: https://www.econbiz.de/10013405970
This paper introduces agent heterogeneity, liquidity, and endogenous default to a DSGE framework. Our model allows for … the economy. Due to liquidity and endogenous default, the transmission mechanism of shocks is well defined, and their …
Persistent link: https://www.econbiz.de/10010272885
How does uncertainty affect the costs of raising finance in the bond market and via bank loans? Empirically, this paper finds that heightened uncertainty is accompanied by an increase in corporate bond yields and a decrease in bank lending rates. This finding can be explained with a model that...
Persistent link: https://www.econbiz.de/10012892132
The phenomenal growth of cryptocurrencies raises important questions about their footprint on the financial system. What role are traditional financial intermediaries playing in cryptocurrency markets and what drives their engagement? Are new nodes emerging? We help answer these questions by...
Persistent link: https://www.econbiz.de/10014290265