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We examine the impact of various dimensions of financial reform on the likelihood of systemic and non-systemic banking crises. Using new financial reform measures for a large sample of developing and developed countries for the period 1973 to 2002, our multivariate probit modeling results...
Persistent link: https://www.econbiz.de/10013095277
ratio) and size (TBA) of the industry are linked to lower sovereign risk in general. Foreign bank penetration and …
Persistent link: https://www.econbiz.de/10012955275
The current financial crisis has sparked intense debate about how weak banks should be resolved. Despite international efforts to coordinate and converge on such policies, national policy advice and resolution practices differ. The resolution methods adopted in the Nordic banking crises in the...
Persistent link: https://www.econbiz.de/10013095558
Most theoretical central bank models use short horizons and focus on a single tradeoff. However, in reality central … bankruptcy. We term these factors discipline and stability effects, respectively. The central bank's welfare decreases with …
Persistent link: https://www.econbiz.de/10013080504
intervention have stronger effects beyond borders. We provide a model of international contagion allowing for bank bailouts. While …
Persistent link: https://www.econbiz.de/10013128043
I review the state of the art of the academic theoretical and empirical literature on the potential trade-off between competition and stability in banking. There are two basic channels through which competition may increase instability: by exacerbating the coordination problem of...
Persistent link: https://www.econbiz.de/10013094726
We study the efficiency of banking regulation under financial integration. Banks freely choose the jurisdiction where to locate their activities and have private information about their efficiency level. Regulators non-cooperatively offer any regulatory contract that satisfies information and...
Persistent link: https://www.econbiz.de/10012991941
This paper seeks to understand the interplay between banks, bank regulation, sovereign default risk and central bank … guarantees in a monetary union. I assume that banks can use sovereign bonds for repurchase agreements with a common central bank … cheaply, effectively shifting the risk of some of the potential sovereign default losses on the common central bank …
Persistent link: https://www.econbiz.de/10013076729
This paper analyzes the effect of the removal of government guarantees on bank risk taking. We exploit the removal of …
Persistent link: https://www.econbiz.de/10013055384
We present a network model of the interbank market in which optimizing risk averse banks lend to each other and invest in non-liquid assets. Market clearing takes place through a tâtonnement process which yields the equilibrium price, while traded quantities are determined by means of a...
Persistent link: https://www.econbiz.de/10013028909