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Islamic Finance, Consumer Protection, and Financial Stability
Lukonga, Inutu - 2015
Consumer protection and financial literacy are essential pillars of a well functioning and stable financial system. As the global financial crisis demonstrated, inadequate attention to consumer protection and financial literacy can lead to financial instability. Though Shari'ah principles...
Persistent link: https://www.econbiz.de/10013021443
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Banking and Trading
Ratnovski, Lev - 2012
We study the effects of a bank's engagement in trading. Traditional banking is relationship-based: not scalable, long-term oriented, with high implicit capital, and low risk (thanks to the law of large numbers). Trading is transactions-based: scalable, shortterm, capital constrained, and with...
Persistent link: https://www.econbiz.de/10013098572
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Assessing the Cost of Financial Regulation
Elliott, Douglas - 2012
This study assesses the overall impact on credit of the financial regulatory reforms in Europe, Japan, and the United States. Long-term cost estimates are provided for Basel III capital and liquidity requirements, derivatives reforms, and higher taxes and fees. Overall, average lending rates in...
Persistent link: https://www.econbiz.de/10013099136
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The Nonlinear Relationship between Public Debt and Sovereign Credit Ratings
Hadzi-Vaskov, Metodij - 2019
probability of being placed in a higher rating category; ii) the negative debt-ratings relationship is nonlinear and depends on … the rating grade itself; and iii) the identified nonlinearity explains the differential impact of debt on ratings in … findings underscore the potential for fiscal consolidation in helping countries achieve a better credit rating …
Persistent link: https://www.econbiz.de/10012864106
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How is the Likelihood of Fire Sales in a Crisis Affected by the Interaction of Various Bank Regulations?
Kirti, Divya - 2017
We present a model that describes how different types of bank regulation can interact to affect the likelihood of fire sales in a crisis. In our model, risk shifting motives drive how banks recapitalize following a negative shock, leading banks to concentrate their portfolios. Regulation affects...
Persistent link: https://www.econbiz.de/10012956306
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Bank Profitability and Risk-Taking
Martynova, Natalya - 2016
Traditional theory suggests that more profitable banks should have lower risk-taking incentives. Then why did many profitable banks choose to invest in untested financial instruments before the crisis, realizing significant losses? We attempt to reconcile theory and evidence. In our setup, banks...
Persistent link: https://www.econbiz.de/10012999745
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The Valuation Effects of Geographic Diversification : Evidence from U.S. Banks
Laeven, Luc - 2012
This paper assesses the impact of the geographic diversification of bank holding company (BHC) assets across the United States on their market valuations. Using two novel identification strategies based on the dynamic process of interstate bank deregulation, we find that exogenous increases in...
Persistent link: https://www.econbiz.de/10013110090
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Securitization : Lessons Learned and the Road Ahead
Segoviano Basurto, Miguel - 2014
This paper examines the financial stability implications arising from securitization markets, with one eye on the past and another on the future. The paper begins by deriving a number of “lessons learned” based on an examination of key industry developments in the years before the crisis....
Persistent link: https://www.econbiz.de/10013060543
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Competition vs. Stability : Oligopolistic Banking System with Run Risk
Capelle, Damien - 2022
This paper develops a model where large financial intermediaries subject to systemic runs internalize the effect of their leverage on aggregate risk, returns and asset prices. Near the steady-state, they restrict leverage to avoid the risk of a run which gives rise to an accelerator effect. For...
Persistent link: https://www.econbiz.de/10013305673
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Quantitative Easing and Credit Rating Agencies
Abidi, Nordine; Falagiarda, Matteo; Miquel-Flores, Ixart - 2022
This paper investigates the behaviour of credit rating agencies using a natural experiment in monetary policy. We … exploit the corporate QE of the Eurosystem and its rating-based specific design which generates exogenous variation in the … probability for a bond of becoming eligible for outright purchases. We show that after the launch of the policy, rating activity …
Persistent link: https://www.econbiz.de/10013405784