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Resolving Debt Overhang: Political Constraints in the Aftermath of Financial Crises
Mian, Atif; Sufi, Amir; Trebbi, Francesco - National Bureau of Economic Research (NBER) - 2012
Debtors bear the brunt of a decline in asset prices associated with financial crises and policies aimed at partial debt relief may be warranted to boost growth in the midst of crises. Drawing on the US experience during the Great Recession of 2008-09 and historical evidence in a large panel of...
Persistent link: https://www.econbiz.de/10009652773
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Efficient Recapitalization
PHILIPPON, Thomas; Schnabl, Philipp - National Bureau of Economic Research (NBER) - 2009
lower credit risk because of other banks' participation. Efficient recapitalization is profitable if the benefits of lower … aggregate credit risk exceed the cost of implicit transfers to bank debt holders. …
Persistent link: https://www.econbiz.de/10005000616
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Saving Your Home in Chapter 13 Bankruptcy
White, Michelle J.; Zhu, Ning - National Bureau of Economic Research (NBER) - 2008
This paper examines how filing for bankruptcy under Chapter 13 helps financially distressed debtors save their homes. We develop a model of debtors' decisions to default on their mortgages and file for bankruptcy under Chapter 13 and evaluate the model using new data on Chapter 13 bankruptcy...
Persistent link: https://www.econbiz.de/10005778894
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Macroeconomic Effects of Corporate Default Crises: A Long-Term Perspective
Longstaff, Francis A.; Giesecke, Kay; Schaefer, Stephen; … - National Bureau of Economic Research (NBER) - 2012
Using an extensive new data set on corporate bond defaults in the U.S. from 1866 to 2010, we study the macroeconomic effects of bond market crises and contrast them with those resulting from banking crises. During the past 150 years, the U.S. has experienced many severe corporate default crises...
Persistent link: https://www.econbiz.de/10009493261
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Implicit Guarantees and Risk Taking: Evidence from Money Market Funds
Kacperczyk, Marcin; Schnabl, Philipp - National Bureau of Economic Research (NBER) - 2011
bankruptcy and to curb the firm's risk taking outside bankruptcy. We analyze the role of such implicit guarantees in the context … expansion in risk-taking opportunities of money market funds during the period of August 2007 to August 2008. We find that a … financial institutions with higher equity take on less risk than those sponsored by financial institutions with lower equity …
Persistent link: https://www.econbiz.de/10009251486
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Bankruptcy and the Collateral Channel
Benmelech, Efraim; Bergman, Nittai K. - National Bureau of Economic Research (NBER) - 2010
Do bankrupt firms impose negative externalities on their non-bankrupt competitors? We propose and analyze a collateral channel in which a firm's bankruptcy reduces collateral values of other industry participants, thereby increasing the cost of external debt finance industry wide. To identify...
Persistent link: https://www.econbiz.de/10008627161
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Rollover Risk and Credit Risk
Xiong, Wei; He, Zhiguo - National Bureau of Economic Research (NBER) - 2010
This paper models a firm's rollover risk generated by conflict of interest between debt and equity holders. When the …
Persistent link: https://www.econbiz.de/10008631672
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Moral and Social Constraints to Strategic Default on Mortgages
Guiso, Luigi; Sapienza, Paola; Zingales, Luigi - National Bureau of Economic Research (NBER) - 2009
We use survey data to study American households' propensity to default when the value of their mortgage exceeds the value of their house even if they can afford to pay their mortgage (strategic default). We find that 26% of the existing defaults are strategic. We also find that no household...
Persistent link: https://www.econbiz.de/10005039683
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An Empirical Model of Subprime Mortgage Default From 2000 to 2007
Bajari, Patrick; Chu, Chenghuan Sean; Park, Minjung - National Bureau of Economic Research (NBER) - 2008
The turmoil that started with increased defaults in the subprime mortgage market has generated instability in the financial system around the world. To better understand the root causes of this financial instability, we quantify the relative importance of various drivers behind subprime...
Persistent link: https://www.econbiz.de/10005718415
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House Prices, Home Equity-Based Borrowing, and the U.S. Household Leverage Crisis
Mian, Atif; Sufi, Amir - National Bureau of Economic Research (NBER) - 2009
Using individual-level data on homeowner debt and defaults from 1997 to 2008, we show that borrowing against the increase in home equity by existing homeowners is responsible for a significant fraction of both the sharp rise in U.S. household leverage from 2002 to 2006 and the increase in...
Persistent link: https://www.econbiz.de/10005034331