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The resolution of a systemically important insurance company during the Great Depression

Rose, Jonathan - 2015

This paper explores the economic issues related to systemically important insurance companies, using an example from the Great Depression, the National Surety Company. National Surety was a large and diverse insurance company that experienced a major crisis in 1933 due to losses from its...

Persistent link: https://www.econbiz.de/10011499676

Learning from history : volatility and financial crises

Daníelsson, Jón; Valenzuela, Marcela; Zer, Ilknur - 2016

We study the effects of stock market volatility on risk-taking and financial crises by constructing a cross-country database spanning up to 211 years and 60 countries. Prolonged periods of low volatility have strong in-sample and out-of-sample predictive power over the incidence of banking...

Persistent link: https://www.econbiz.de/10011578981

Financial stability and optimal interest-rate policy

Ajello, Andrea; Laubach, Thomas; López-Salido, José David - 2016

We study optimal interest-rate policy in a New Keynesian model in which the economy can experience financial crises and the probability of a crisis depends on credit conditions. The optimal adjustment to interest rates in response to credit conditions is (very) small in the model calibrated to...

Persistent link: https://www.econbiz.de/10011578304

What macroeconomic conditions lead financial crises?

Kiley, Michael T. - 2018 - Version 6

Research has suggested that a rapid pace of nonfinancial borrowing reliably precedes financial crises, placing the pace of debt growth at the center of frameworks for the deployment of macroprudential policies. I reconsider the role of asset-prices and current account deficits as leading...

Persistent link: https://www.econbiz.de/10011932225

Income inequality, financial crises, and monetary policy

Cairó, Isabel; Sim, Jae W. - 2018

We construct a general equilibrium model in which income inequality results in insufficient aggregate demand, deflation pressure, and excessive credit growth by allocating income to agents featuring low marginal propensity to consume, and if excessive, can lead to an endogenous financial crisis....

Persistent link: https://www.econbiz.de/10011932429

Shock transmission through cross-border bank lending : credit and real effects

Hale, Galina; Kapan, Tümer; Minoiu, Camelia - 2019

We study the transmission of financial shocks across borders through international bank connections. Using data on … reduce bank returns and tighten credit conditions for borrowers, constraining investment and growth. The effects are larger …

Persistent link: https://www.econbiz.de/10012181946

Strategic liquidity mismatch and financial sector stability

Silva, André F. - 2019

This paper examines whether banks strategically incorporate their competitors' liquidity mismatch policies when determining their own and how these collective decisions impact financial sector stability. Using a novel identification strategy exploiting the presence of partially overlapping peer...

Persistent link: https://www.econbiz.de/10012182410

Managing stigma during a financial crisis

Anbil, Sriya - 2017

never reveals bank identities would mitigate stigma …

Persistent link: https://www.econbiz.de/10011708103

Understanding bank and nonbank credit cycles : a structural exploration

Durdu, Ceyhun Bora; Zhong, Molin - 2019

We explore the structural drivers of bank and nonbank credit cycles using an estimated medium-scale macro model that … allows for bank and nonbank financial intermediation. We posit economy-wide aggregate and sectoral disturbances to … potentially drive bank and nonbank credit growth. We find that sectoral shocks affecting the balance sheets of entrepreneurs who …

Persistent link: https://www.econbiz.de/10012181042

The effect of bank supervision on risk taking : evidence from a natural experiment

Kandrac, John; Schlusche, Bernd - 2017

In this paper, we exploit a natural experiment in which thrifts in several states witnessed an exogenous reduction in supervisory attention to assess the effect of supervision on financial institutions' willingness to take risk. We show that the affected institutions took on much more risk than...

Persistent link: https://www.econbiz.de/10011710132

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