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Competition in Lending and Credit Ratings

Ahmed, Javed - 2016

This article relates corporate credit rating quality to competition in lending between the public bond market and banks …. In the model, the monopolistic rating agency's choice of price and quality leads to an endogenous threshold separating … high-quality issuers, which threatens rating agency profits, and informative ratings result to prevent defection of high …

Persistent link: https://www.econbiz.de/10013006572

Liquidity Windfalls : The Consequences of Repo Rehypothecation

Infante, Sebastian - 2015

This paper presents a model of repo rehypothecation in which dealers intermediate funds and collateral between cash lenders (e.g., money market funds) and prime brokerage clients (e.g., hedge funds). Dealers take advantage of their position as intermediaries, setting different repo terms with...

Persistent link: https://www.econbiz.de/10013023815

Are the Borrowing Costs of Large Financial Firms Unusual?

Ahmed, Javed - 2015

Estimates of investor expectations of government support of large financial firms are often based on large financial firms' lower borrowing costs relative to smaller financial firms. Using pricing data on credit default swaps (CDS) and corporate bonds over the period 2004 to 2013, however, we...

Persistent link: https://www.econbiz.de/10013023801

The Volcker Rule and market-making in times of stress

Bao, Jack; O'Hara, Maureen; Zhou, Alex - 2016

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

Safe Collateral, Arm's-Length Credit : Evidence from the Commercial Real Estate Mortgage Market

Black, Lamont; Krainer, John; Nichols, Joseph - 2017

and creditors in the commercial real estate mortgage market by comparing loans in commercial mortgage backed securities …

Persistent link: https://www.econbiz.de/10014121171

Interest Rate Risk and Bank Equity Valuations

English, William B. - 2012

Because they engage in maturity transformation, a steepening of the yield curve should, all else equal, boost bank profitability. We re-examine this conventional wisdom by estimating the reaction of bank intraday stock returns to exogenous fluctuations in interest rates induced by monetary...

Persistent link: https://www.econbiz.de/10013106774

The Cross-Market Spillover of Economic Shocks Through Multi-Market Banks

Berrospide, Jose M. - 2013

This paper investigates the mortgage lending of banks operating in multiple U.S. metropolitan areas during the housing market collapse of 2007-2009. Some metro areas in the U.S. suffered much greater mortgage defaults than others. We use this regional variation to identify whether high mortgage...

Persistent link: https://www.econbiz.de/10013074441

Forward-Looking and Incentive-Compatible Operational Risk Capital Framework

Migueis, Marco - 2020

This paper proposes an alternative framework to set banksâ€™ operational risk capital, which allows for forward-looking assessments and limits gaming opportunities by relying on an incentive-compatible mechanism. This approach would improve upon the vulnerability to gaming of the AMA and...

Persistent link: https://www.econbiz.de/10012853833

Community Bank Performance : How Important are Managers?

Amel, Dean F. - 2014

Community banks have long played an important role in the U.S. economy, providing loans and other financial services to households and small businesses within their local markets. In recent years, technological and legal developments, as well as changes in the business strategies of larger banks...

Persistent link: https://www.econbiz.de/10013055695

Corporate Governance and Risk Management at Unprotected Banks : National Banks in the 1890s

Calomiris, Charles W. - 2014

Managers' incentives may conflict with those of shareholders or creditors, particularly at leveraged, opaque banks. Bankers may abuse their control rights to give themselves excessive salaries, favored access to credit, or to take excessive risks that benefit themselves at the expense of...

Persistent link: https://www.econbiz.de/10013059443

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