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Benmelech, Efraim - 2010

Collateralized Loan Obligations (CLOs) were one of the largest and fastest growing segments of the structured finance market, fueling the 2003-2007 boom in syndicated loans and leveraged buyouts. The credit crisis brought CLO issuance to a halt, and as a result the leveraged loan market dried...

Persistent link: https://www.econbiz.de/10012757547

Financial Intermediation, Exchange Rates, and Unconventional Policy in an Open Economy

Céspedes, Luis Felipe - 2012

collateral constraints, and uses the model to study unconventional policies such as credit facilities and foreign exchange …

Persistent link: https://www.econbiz.de/10013099827

The Macroeconomics of Shadow Banking

Moreira, Alan - 2014

collateral is scarce. We call this process shadow banking. A rise in uncertainty raises demand for crash-proof liquidity, forcing … intermediaries to delever and substitute toward safe, collateral- intensive liabilities. Shadow banking shrinks, causing the … liquidity supply to contract, discount rates and collateral premia spike, prices and investment fall. The model produces slow …

Persistent link: https://www.econbiz.de/10013050154

Liquidity, Pledgeability, and the Nature of Lending

Diamond, Douglas W.; Hu, Yunzhi; Rajan, Raghuram Govind - 2022

We develop a theory of how corporate lending and financial intermediation change based on the fundamentals of the firm and its environment. We focus on the interaction between the prospective net worth or liquidity of an industry and the firm’s internal governance or pledgeability. Variations...

Persistent link: https://www.econbiz.de/10013404677

Collateral Valuation and Borrower Financial Constraints : Evidence from the Residential Real Estate Market

Agarwal, Sumit - 2013

Financially constrained borrowers have the incentive to influence the appraisal process in order to increase borrowing or reduce the interest rate. We document that the average valuation bias for residential refinance transactions is above 5%. The bias is larger for highly leveraged...

Persistent link: https://www.econbiz.de/10013073558

Repossession and the Democratization of Credit

Assunção, Juliano J. - 2014

We exploit a 2004 credit reform in Brazil that simplified the sale of repossessed cars used as collateral for auto … of a credit reform, highlighting the crucial role that collateral and repossession play in the liberalization and …

Persistent link: https://www.econbiz.de/10013066574

Asset Quality Misrepresentation by Financial Intermediaries : Evidence from Rmbs Market

Piskorski, Tomasz - 2013

We contend that buyers received false information about the true quality of assets in contractual disclosures by intermediaries during the sale of mortgages in the $2 trillion non-agency market. We construct two measures of misrepresentation of asset quality - misreported occupancy status of...

Persistent link: https://www.econbiz.de/10013085379

The Credit Ratings Game

Bolton, Patrick - 2010

The spectacular failure of top-rated structured finance products has brought renewed attention to the conflicts of interest of Credit Rating Agencies (CRAs). We model both the CRA conflict of understating credit risk to attract more business, and the issuer conflict of purchasing only the most...

Persistent link: https://www.econbiz.de/10012757875

Two Monetary Tools : Interest Rates and Haircuts

Ashcraft, Adam B. - 2010

We study a production economy with multiple sectors financed by issuing securities to agents who face capital constraints. Binding capital constraints propagate business cycles, and a reduction of the interest rate can increase the required return of high-haircut assets since it can increase the...

Persistent link: https://www.econbiz.de/10013138470

Central Clearing and Collateral Demand

Duffie, Darrell - 2014

We use an extensive data set of bilateral exposures on credit default swap (CDS) to estimate the impact on collateral … demand of new margin and clearing practices and regulations. We decompose collateral demand for both customers and dealers … impact on collateral demand of more widespread initial margin requirements, increased novation of CDS to central clearing …

Persistent link: https://www.econbiz.de/10013059087