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Wieland, Johannes F. - 2016

We propose a novel mechanism, "financial dampening," whereby loan retrenchment by banks attenuates the effectiveness of monetary policy. The theory unifies an endogenous supply of illiquid local loans and risk-sharing among subsidiaries of bank holding companies (BHCs). We derive an IV-strategy...

Persistent link: https://www.econbiz.de/10012456534

Specialization in Bank Lending : Evidence from Exporting Firms

Paravisini, Daniel - 2015

We develop an empirical approach for identifying specialization in bank lending using granular data on borrower activities. We illustrate the approach by characterizing bank specialization by export market, combining bank, loan, and export data for all firms in Peru. We find that all banks...

Persistent link: https://www.econbiz.de/10012456871

Financing as a Supply Chain : The Capital Structure of Banks and Borrowers

Gornall, William - 2013

We develop a model of the joint capital structure decisions of banks and their borrowers. Strikingly high bank leverage emerges naturally from the interplay between two sets of forces. First, seniority and diversification reduce bank asset volatility by an order of magnitude relative to that of...

Persistent link: https://www.econbiz.de/10012459028

Risky Investments with Limited Commitment

Cooley, Thomas F. - 2013

Over the last three decades there has been a dramatic increase in the size of the financial sector and in the compensation of financial executives. This increase has been associated with greater risk-taking and the use of more complex financial instruments. Parallel to this trend, the...

Persistent link: https://www.econbiz.de/10012459068

Efficient Bailouts?

Bianchi, Javier - 2012

We develop a quantitative equilibrium model of financial crises to assess the interaction between ex-post interventions in credit markets and the buildup of risk ex ante. During a systemic crisis, bailouts relax balance sheet constraints and mitigate the severity of the recession. Ex ante, the...

Persistent link: https://www.econbiz.de/10012460074

Sizing Up Repo

Krishnamurthy, Arvind - 2012

We measure the repo funding extended by money market funds (MMF) and securities lenders to the shadow banking system …

Persistent link: https://www.econbiz.de/10012460892

Bank Relationships, Business Cycles, and Financial Crises

Hale, Galina - 2011

relationships during 1980-2009 time period, we construct a global banking network of 7938 banking institutions from 141 countries …. We find that recessions and banking crises tend to have negative effects on the formation of new connections and that … a large negative impact on the formation of new relationships in the global banking network, especially by large banks …

Persistent link: https://www.econbiz.de/10012461302

Leverage Across Firms, Banks, and Countries

Kalemli-Ozcan, Sebnem - 2011

We present new stylized facts on bank and firm leverage for 2000-2009 using extensive internationally comparable micro level data from several countries. The main result is that there was very little buildup in leverage for the average non-financial firm and commercial bank before the crisis,...

Persistent link: https://www.econbiz.de/10012461304

Why Did U.S. Banks Invest in Highly-Rated Securitization Tranches?

Erel, Isil - 2011

We estimate holdings of highly-rated tranches of mortgage securitizations of American deposit-taking banks ahead of the credit crisis and evaluate hypotheses that have been advanced to explain these holdings. We find that holdings of highly-rated tranches were economically trivial for the...

Persistent link: https://www.econbiz.de/10012461388

This Time Is the Same : Using Bank Performance in 1998 to Explain Bank Performance During the Recent Financial Crisis

Fahlenbrach, Rüdiger - 2011

We investigate whether a bank's performance during the 1998 crisis, which was viewed at the time as the most dramatic crisis since the Great Depression, predicts its performance during the recent financial crisis. One hypothesis is that a bank that has an especially poor experience in a crisis...

Persistent link: https://www.econbiz.de/10012461620