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Do Strict Capital Requirements Raise the Cost of Capital? Banking Regulation and the Low Risk Anomaly

Baker, Malcolm - 2013

perfect and efficient capital markets, reducing banks' leverage reduces the risk and cost of equity but leaves the overall …-capitalized banks has lower systematic risk (beta) and lower idiosyncratic risk. However, over the last 40 years, lower risk banks have … other samples. The size of the low risk anomaly within banks suggests that the cost of capital effects of capital …

Persistent link: https://www.econbiz.de/10012459645

Did Capital Requirements and Fair Value Accounting Spark Fire Sales in Distressed Mortgage-Backed Securities?

Merrill, Craig B. - 2012

Much attention has been paid to the large decreases in value of non-agency residential mortgage-backed securities (RMBS) during the financial crisis. Many observers have argued that the fall in prices was partly driven by decreased liquidity and fire sales. We investigate whether capital...

Persistent link: https://www.econbiz.de/10012460390

Competing Liquidities : Corporate Securities, Real Bonds and Bubbles

Farhi, Emmanuel - 2008

We explore the link between liquidity and investment in a an overlapping generation model with a standard asynchronicity between firms' access to and need for cash. Imperfect pledgeability hinders the capacity of capital markets to resolve this asynchronicity, resulting in credit rationing and a...

Persistent link: https://www.econbiz.de/10012464692

Inefficient Credit Booms

Lorenzoni, Guido - 2007

This paper studies the welfare properties of competitive equilibria in an economy with financial frictions hit by aggregate shocks. In particular, it shows that competitive financial contracts can result in excessive borrowing ex ante and excessive volatility ex post. Even though, from a...

Persistent link: https://www.econbiz.de/10012465000

International Financial Integration and Entrepreneurial Firm Activity

Alfaro, Laura - 2007

We explore the relation between international financial integration and the level of entrepreneurial activity in a country. We use a unique firm level data set of approximately 24 million firms in nearly 100 countries in 2004 and 1999, which enables us to present both cross-country and industry...

Persistent link: https://www.econbiz.de/10012465536

Tracing the Impact of Bank Liquidity Shocks : Evidence from an Emerging Market

Mian, Atif - 2006

isolate the causal impact of the bank lending channel by showing that for the same firm borrowing from two different banks … effect by borrowing more from more liquid banks - both through existing and new banking relationships. In contrast, small …

Persistent link: https://www.econbiz.de/10012466049

Financially Constrained Stock Returns

Livdan, Dmitry - 2006

More financially constrained firms are riskier and earn higher expected returns than less financially constrained firms, although this effect can be subsumed by size and book-to-market. Further, because the stochastic discount factor makes capital investment more procyclical, financial...

Persistent link: https://www.econbiz.de/10012466107

Phoenix Miracles in Emerging Markets : Recovering without Credit from Systemic Financial Crises

Calvo, Guillermo A. - 2006

collapse and recovery phase of output collapses that coincide with systemic sudden stops, defined as periods of skyrocketing aggregate bond spreads and large capital flow reversals. Our findings indicate the presence of a very similar pattern across different episodes: output recovers with...

Persistent link: https://www.econbiz.de/10012466567

Do Capital Adequacy Requirements Matter for Monetary Policy?

Cecchetti, Stephen G. - 2005

there are always sufficient lending activities to maintain high and stable economic growth, supervisors work to limit banks …

Persistent link: https://www.econbiz.de/10012466841

A Re-Examination of the Conglomerate Merger Wave in the 1960s : An Internal Capital Markets View

Hubbard, R. Glenn - 1998

One possible explanation that bidding firms earned positive abnormal returns in diversifying acquisitions in the 1960s is that internal capital markets were expected to overcome the information deficiencies of the less developed capital markets. Examining 392 bidder firms during the 1960s, we...

Persistent link: https://www.econbiz.de/10012472268