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Liquidity Risk, Liquidity Creation and Financial Fragility : A Theory of Banking

Diamond, Douglas W. - 1999

Both investors and borrowers are concerned about liquidity. Investors desire liquidity because they are uncertain about … when they will want to eliminate their holding of a financial asset. Borrowers are concerned about liquidity because they … compensation for the illiquidity investors will be subject to. We argue that banks can resolve these liquidity problems that arise …

Persistent link: https://www.econbiz.de/10012471328

Liquidity Crises in Emerging Markets : Theory and Policy

Chang, Roberto - 1999

We build a model of financial sector illiquidity in an open economy. Illiquidity defined as a situation in which a country's consolidated financial system has potential short-term obligations in foreign currency that exceed the amount of foreign currency it can have access to on short notice can...

Persistent link: https://www.econbiz.de/10012471518

Evidence of Improved Monitoring and Insolvency Resolution after FDICIA

Kane, Edward J. - 2008

Giving the FDIC authority to wind up troubled banks before their tangible net worth is exhausted has reduced the role of government in the insolvency-resolution process. Consistent with an hypothesis that FDICIA has improved incentives, our data show that a markedly larger percentage of troubled...

Persistent link: https://www.econbiz.de/10012464072

Zombie Lending and Depressed Restructuring in Japan

Caballero, Ricardo J. - 2006

In this paper, we propose a bank-based explanation for the decade-long Japanese slowdown following the asset price collapse in the early 1990s. We start with the well-known observation that most large Japanese banks were only able to comply with capital standards because regulators were lax in...

Persistent link: https://www.econbiz.de/10012466526

Hierarchical bank supervision

Repullo, Rafael - 2017

Persistent link: https://www.econbiz.de/10011819944

Causes of the Korean Financial Crisis : Lessons for Policy

Hahm, Joon-Ho - 2000

This paper uses an asymmetric information framework to understand the causes of the recent financial crisis in Korea. It shows that the Korean data is consistent with this explanation of the crisis. It then draws on this analysis to discuss several lessons that can help guide Korean policymakers...

Persistent link: https://www.econbiz.de/10012471293