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. This link is broadly predicted by the theoretical literature on two-sided markets, but the nature and magnitude of price … competitive response to price changes made by regulated banks. Not accounting for such competitive responses underestimates the …
Persistent link: https://www.econbiz.de/10011710091
The Durbin Amendment to the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 alters the competitive structure of the debit card payment processing industry and caps debit card interchange fees for banks with over $10 billion in assets. Market participants predicted that debit...
Persistent link: https://www.econbiz.de/10013046469
We adopt a systemic risk indicator measured by the price of insurance against systemic financial distress and assess …
Persistent link: https://www.econbiz.de/10013127090
Focusing on downgrades as stress events that drive the selling of corporate bonds, we document that the illiquidity of stressed bonds has increased after the Volcker Rule. Dealers regulated by the Rule have decreased their market-making activities while non-Volcker-affected dealers have stepped...
Persistent link: https://www.econbiz.de/10011579150
This paper investigates depository institutions' decisions whether or not to impose surcharges (direct usage fees) on non-depositors who use their ATMs. In addition to documenting patterns of surcharging, we examine motives for surcharging, including both direct generation of fee revenue and the...
Persistent link: https://www.econbiz.de/10012706882
Bank accounts are critical for participation in the modern economy. However, these accounts frequently require maintenance fees and incur overdraft charges. We assess whether minimum account balances to avoid fees, account maintenance fee amounts, and non-sufficient funds charges are...
Persistent link: https://www.econbiz.de/10013404805
We develop a parsimonious model to study the equilibrium structure of financial markets and its efficiency properties. We find that regulations aimed at improving market outcomes can cause inefficiencies. The welfare benefit of such regulation stems from endogenously improving market access for...
Persistent link: https://www.econbiz.de/10011803686
We study how competition between banks and non-banks affects lending standards. Banks have private information about some borrowers and are subject to capital requirements to mitigate risk-taking incentives from deposit insurance. Non-banks are uninformed and market forces determine their...
Persistent link: https://www.econbiz.de/10014048731
We construct a model of a bank's optimal funding choice, where the bank negotiates with both safety-driven short-term bondholders and (mostly) risk-taking long-term bondholders. We establish that investor demands for safety create a negative relationship between the bank's capital choices and...
Persistent link: https://www.econbiz.de/10014048751
Operational risk models, such as the loss distribution approach, frequently use past internal losses to forecast operational loss exposure. However, the ability of past losses to predict exposure, particularly tail exposure, has not been thoroughly examined in the literature. In this paper, we...
Persistent link: https://www.econbiz.de/10012999684