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Asset Liquidity and International Portfolio Choice
Geromichalos, Athanasios - 2011
over faster than domestic assets because the former have desirable liquidity properties, but represent inferior saving …
Persistent link: https://www.econbiz.de/10013121055
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Optimal Taxation in the Presence of Bailouts
Panageas, Stavros - 2010
The termination of a representative financial firm due to excessive leverage may lead to substantial bankruptcy costs. A government in the tradition of Ramsey (1927) may be inclined to provide transfers to the firm so as to prevent its liquidation and the associated deadweight costs. It is shown...
Persistent link: https://www.econbiz.de/10013150643
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Bailouts, the Incentive to Manage Risk, and Financial Crises
Panageas, Stavros - 2010
A firm's termination leads to bankruptcy costs. This may create an incentive for outside stakeholders or the firm's debtholders to bail out the firm as bankruptcy looms. Because of this implicit guarantee, firm shareholders have an incentive to increase volatility in order to exploit the...
Persistent link: https://www.econbiz.de/10013152555
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Fire Sales in a Model of Complexity
Caballero, Ricardo J. - 2009
Financial assets provide return and liquidity services to their holders. However, during severe financial crises many … asset prices plummet, destroying their liquidity provision function at the worst possible time. In this paper we present a … not control or understand. The liquidity of the market quickly vanishes and a financial crisis ensues. The model exhibits …
Persistent link: https://www.econbiz.de/10013155022
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Costs of Financial Distress, Delayed Calls of Convertible Bonds, and the Role of Investment Banks
Shleifer, Andrei - 2010
In a frictionless market with perfect information, a shareholder-wealth- maximizing firm should force conversion of its convertible bond issue into stock as soon as the bond comes in-the-money. Firms however appear to systematically delay forced conversion, sometimes for years, beyond this time....
Persistent link: https://www.econbiz.de/10012760209
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Debt Enforcement Around the World
Djankov, Simeon - 2010
We present insolvency practitioners from 88 countries with an identical case of a hotel about to default on its debt, and ask them to describe in detail how debt enforcement against this hotel will proceed in their countries. We use the data on time, cost, and the likely disposition of the...
Persistent link: https://www.econbiz.de/10012760474
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Zombie Lending and Depressed Restructuring in Japan
Caballero, Ricardo J. - 2010
In this paper, we propose a bank-based explanation for the decade-long Japanese slowdown following the asset price collapse in the early 1990s. We start with the well-known observation that most large Japanese banks were only able to comply with capital standards because regulators were lax in...
Persistent link: https://www.econbiz.de/10012761673
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A Dual Liquidity Model for Emerging Markets
Caballero, Ricardo J.; Krishnamurthy, Arvind - 2021
emerging economy, and those affecting borrowing from foreign lenders. This 'dual liquidity' model offers a parsimonious …
Persistent link: https://www.econbiz.de/10013224671
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Fiscal Policy and Financial Depth
Caballero, Ricardo J.; Krishnamurthy, Arvind - 2021
Most economists and observers place the lack of fiscal discipline at the core of the recent Argentine crisis. This begs the question of how countries like Belgium or Italy (pre-Maastricht) could run large fiscal deficits and accumulate debts far beyond those of Argentina, without experiencing...
Persistent link: https://www.econbiz.de/10013233772
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Asset Fire Sales and Credit Easing
Shleifer, Andrei - 2010
credit easing, defined as a combination of lending to financial institutions, providing liquidity directly to key credit …
Persistent link: https://www.econbiz.de/10013148864