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Governance, Risk Management, and Risk-Taking in Banks
Stulz, René M. - 2014
This paper examines how governance and risk management affect risk-taking in banks. It distinguishes between good risks, which are risks that have an ex ante private reward for the bank on a stand-alone basis, and bad risks, which do not have such a reward. A well-governed bank takes the amount...
Persistent link: https://www.econbiz.de/10013051309
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The Risks of Financial Institutions
Stulz, René M. - 2009
Over the last twenty years, the consensus view of systemic risk in the financial system that emerged in response to the banking crises of the 1930s and before has lost much of its relevance. This view held that the main systemic problem is runs on solvent banks leading to bank panics. But...
Persistent link: https://www.econbiz.de/10012767554
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Risk Management in Financial Institutions
Rampini, Adriano A. - 2019
We study risk management in financial institutions using data on hedging of interest rate and foreign exchange risk. We find strong evidence that institutions with higher net worth hedge more, controlling for risk exposures, both across institutions and within institutions over time. For...
Persistent link: https://www.econbiz.de/10012889497
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Do Strict Capital Requirements Raise the Cost of Capital? Banking Regulation and the Low Risk Anomaly
Baker, Malcolm P. - 2013
Minimum capital requirements are a central tool of banking regulation. Setting them balances a number of factors, including any effects on the cost of capital and in turn the rates available to borrowers. Standard theory predicts that, in perfect and efficient capital markets, reducing banks'...
Persistent link: https://www.econbiz.de/10013082423
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Pillar 1 vs. Pillar 2 Under Risk Management
Schaefer, Stephen M. - 2012
Under the New Basel Accord bank capital adequacy rules (Pillar 1) are substantially revised but the introduction of two …
Persistent link: https://www.econbiz.de/10012755627
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A Note on Liquidity Risk Management
Brunnermeier, Markus K. - 2010
When a firm is unable to roll over its debt, it may have to seek more expensive sources of financing or even liquidate its assets. This paper provides a normative analysis of minimizing such rollover risk, through the optimal dynamic choice of the maturity structure of debt. The objective of a...
Persistent link: https://www.econbiz.de/10012757874
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Basel Ii : A Contracting Perspective
Kane, Edward J. - 2010
incomplete contracts and sequential bargaining to interpret the Basel Accords as a framework for endlessly renegotiating minimal … sectoral effects that the 2004 Basel II agreement might produce. The analysis seeks to explain why, in the U.S., attempting to … resolve these inconsistencies has spawned an embarrassingly fractious debate and repeatedly pushed back Basel II's scheduled …
Persistent link: https://www.econbiz.de/10012760523
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The Risk-Adjusted Cost of Financial Distress
Almeida, Heitor - 2010
In this paper we argue that risk-adjustment matters for the valuation of financial distress costs, since financial distress is more likely to happen in bad times. Systematic distress risk implies that the risk-adjusted probability of financial distress is larger than the historical probability....
Persistent link: https://www.econbiz.de/10012761946
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Risk Bearing, Implicit Financial Services and Specialization in the Financial Industry
Wang, J. Christina - 2009
This paper makes three points regarding the proper measurement of the output of financial intermediaries. Two of them concern the measurement of nominal financial output, especially banking output. First, we show that, to impute the nominal value of implicitly priced financial output, it is...
Persistent link: https://www.econbiz.de/10012764900
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Firms’ Management of Infrequent Shocks
Collier, Benjamin - 2016
We examine businesses' financial management of a rare, severe event using detailed firm-level data collected following Hurricane Sandy in the New York area. Credit played a prominent role in financing recovery; more negatively affected firms took on debt because of Sandy (38%) than received...
Persistent link: https://www.econbiz.de/10012983420