decouple across secured and unsecured markets following an adverse shock to credit risk. The scarcity of underlying collateral …

credit via revaluation of collateral and subsequent lending decisions. Specifically we examine banks’ treatment of real … estate collateral during the Covid-19 crisis. First we find evidence of significant frictions in the trans-mission of asset … price dynamics to collateral values. Despite this we find that lending relationships reliant on real estate collateral …

The paper studies the central bank collateral framework and its impact on banks’ liquidity under an adverse stress test … significantly after the initial shock. We find evidence of a threshold in the benefits of expanding the collateral framework and … institutions can rely on the collateral framework channel …

How do housing bubbles affect other economic sectors? We show that in the presence of collateral constraints, a bubble …

unsecured lending and substantial increases in haircuts on posted collateral. This paper seeks to understand the implications of …

This paper examines the role of collateral in the financial system, with special emphasis on the implications for … financial collateral assets. Then we examine financial stability issues and the case for regulating the use of collateral. We … use of collateral is neither a sufficient nor a necessary condition for financial stability. To ensure the stability of …

their regulatory ratio by altering their collateral pledging with the European Central Bank. We use the existence of … assets. Using security-level information on collateral pledged with the central bank, we find that banks without a preceding … national liquidity requirement pledge more and less liquid collateral than banks with a preceding national liquidity …

on a simple asset pricing model and employing a dataset of hypothetical Eurosystem collateral positions, we simulate and … quantify the resulting change in collateral value pledged by counterparties to the Eurosystem, resulting from a transaction … cost shock. A 10 basis point increase in transaction costs entails a direct -0.30% decrease of collateral value and a -0 …

In this paper, we investigate the economy-wide effects of the collateral channel by exploiting: (i) a legal reform in … Sweden in 2004 that reduced collateral values, and (ii) a dataset that covers all incorporated firms in Sweden over the … period 2000-2006. We find that the loss in collateral value reduces both the amount and the maturity of firm debt and leads …

We build a model of collateral choice by banks that allows to recover the opportunity cost of collateral use and the … Central Bank from 2009 to 2011. The model can be used to quantify how changes in haircuts affect the collateral used by banks … rated collateral would have reduced the use of this collateral by 10% but would have increased the average funding cost …