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This paper highlights the changing collateral landscape and how it may shape the global demand/supply for collateral …. We first identify the key collateral pools (relative to the "old" collateral space) and associated collateral velocities … banks are significantly altering the collateral space. Moreover, regulatory demands stemming from Basel III, Dodd Frank …
Persistent link: https://www.econbiz.de/10013086319
Financial lubrication in markets is indifferent to margin posting via money or collateral; the relative price(s) of … money and collateral matter. Some central banks are now a major player in the collateral markets. Analogous to a coiled … spring, the larger the quantitative easing(QE) efforts, the longer the central banks will impact the collateral market and …
Persistent link: https://www.econbiz.de/10013075545
In global financial centers, short-term market rates are effectively determined in the pledged collateral market, where … banks and other financial institutions exchange collateral (such as bonds and equities) for money. Furthermore, the use of … long-dated securities as collateral for short tenors-or example, in securities-lending and repo markets, and prime …
Persistent link: https://www.econbiz.de/10012868472
global perspective. At the same time, collateral requirements applied by banks are onerous and also constrain the quantity of … the high collateral requirements. Reforms in all these areas would support greater financial inclusion in the aftermath of …
Persistent link: https://www.econbiz.de/10013315106
letters of credit, which during the capital controls period had to be backed by firms’ own cash collateral rather than the …
Persistent link: https://www.econbiz.de/10014256876
This paper studies banks' decision to form financial interconnections using a model of financial contagion that explicitly takes into account the crisis state of the world. This allows us to model the network formation decision as optimising behaviour of competitive banks, where they balance the...
Persistent link: https://www.econbiz.de/10012977783
Depositor preference and collateralization of borrowing may reduce the cost of settling the conflicts among creditors that arises in case of resolution or bankruptcy. This net benefit, which may be capitalized into the value of the bank rather than affect creditors' expected returns, should...
Persistent link: https://www.econbiz.de/10013078050
This study analyzes panel data for 61 countries during 1980-97 and concludes that explicit deposit insurance tends to be detrimental to bank stability, the more so where bank interest rates are deregulated and the institutional environment is weak. Also, the adverse impact of deposit insurance...
Persistent link: https://www.econbiz.de/10013317984
This paper argues that in the European Union (EU) deposit insurance funds are too difficult to use in bank resolution and too easy to use outside resolution. The paper proposes reforms in three areas for the effective management of bank failures of small and medium-sized banks in the European...
Persistent link: https://www.econbiz.de/10013306399
that allows collateral posted by, say, a hedge fund to its prime broker to be used again as collateral by that prime broker … rehypothecation (and the associated re-use of collateral) in the recent crisis indicates that the collapse in non-bank funding to … provide estimates from the hedge fund industry for the “churning” factor or re-use of collateral. From a policy angle …
Persistent link: https://www.econbiz.de/10013138535