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What Slice of the Pie? The Corporate Bond Market Boom in Emerging Economies
Ayala, Diana - 2017
currency bond markets increasingly substituted for banks in channeling liquidity to EMs. In the case of foreign currency …
Persistent link: https://www.econbiz.de/10012960099
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Interest Rates under Falling Stars
Bauer, Michael - 2020
Macro-finance theory implies that trend ination and the equilibrium real interest rate are fundamental determinants of …
Persistent link: https://www.econbiz.de/10012853894
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Modeling Two Macro Policy Instruments - Interest Rates and Aggregate Capital Requirements
Gersbach, Hans - 2013
We present a simple neoclassical model to explore how an aggregate bank-capital requirement can be used as a macroeconomic policy tool and how this additional tool interacts with monetary policy. Aggregate bank-capital requirements should be adjusted when the economy is hit by cost-push shocks...
Persistent link: https://www.econbiz.de/10013092337
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Exchange Rate Dynamics Under Alternative Optimal Interest Rate Rules
Binici, Mahir - 2013
We explore the role of interest rate policy in the exchange rate determination process. Specifically, we derive exchange rate equations from interest rate rules that are theoretically optimal under a few alternative settings. The exchange rate equation depends on its underlying interest rate...
Persistent link: https://www.econbiz.de/10013092385
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Illiquidity and Under-Valuation of Firms
Gale, Douglas M. - 2012
We study a competitive model in which market incompleteness implies that debt-financed firms may default in some states of nature and default may lead to the sale of the firms' assets at fire sale prices when markets are illiquid. This incompleteness is the only friction in the model and the...
Persistent link: https://www.econbiz.de/10013116475
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Endogenous Systemic Liquidity Risk
Cao, Jin - 2013
Traditionally, aggregate liquidity shocks are modelled as exogenous events. Extending our previous work (Cao & Illing …, 2008), this paper analyses the adequate policy response to endogenous systemic liquidity risk. We analyse the feedback … between lender of last resort policy and incentives of private banks, determining the aggregate amount of liquidity available …
Persistent link: https://www.econbiz.de/10013095988
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Basel Accord and Financial Intermediation : The Impact of Policy
Berka, Martin - 2013
This paper studies loan activity in a context where banks must follow Basel Accord-type rules and acquire financing from households. Loan activity typically decreases when entrepreneurs' investment returns decline, and we study which type of policy could revigorate an economy in a trough. We...
Persistent link: https://www.econbiz.de/10013091686
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Optimal Risk-Sharing in Mortgage Contracts : The Effects of Potential Prepayment and Default
Brueckner, Jan K. - 2014
Much of the literature on the economics of mortgage markets has studied the FRM-ARM choice made by individual borrowers. However, to decide if the outcome of such a choice is efficient or approximately so, it is necessary to explore the question of optimal risk-sharing in mortgage contracts. But...
Persistent link: https://www.econbiz.de/10013046055
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Creditor Passivity : The Effects of Bank Competition and Institutions on the Strategic Use of Bankruptcy Filings
Hainz, Christa - 2021
Why do banks remain passive? In a model of bank-firm relationship we study the trade-off a bank faces when having defaulting firms declared bankrupt. First, the bank receives a payoff if a firm is liquidated. Second, it provides information about a firm's type to its competitors. Thereby,...
Persistent link: https://www.econbiz.de/10013316824
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Rumors and Runs in Opaque Markets : Evidence from Panic of 1907
Fohlin, Caroline - 2016
impact of information asymmetry during the liquidity freeze and market run of October 1907 - one of the most severe financial …
Persistent link: https://www.econbiz.de/10012981593