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We test whether measures of potential influence on regulators affect stress test outcomes. The large trading banks - those most plausibly 'Too big to Fail' - face the toughest tests. In contrast, we find no evidence that either political or regulatory connections affect the tests. Stress tests...
Persistent link: https://www.econbiz.de/10012482067
, their ownership structures, and national bank regulations. We focus on conflicts between bank managers and owners over risk …, and show that bank risk taking varies positively with the comparative power of shareholders within the corporate … governance structure of each bank. Moreover, we show that the relation between bank risk and capital regulations, deposit …
Persistent link: https://www.econbiz.de/10012464532
In a partial-equilibrium model, removing a binding constraint creates value. However, in general equilibrium, the stakes of other parties in maintaining the constraint must be examined. In financial deregulation, the fear is that expanding the scope and geographic reach of very large...
Persistent link: https://www.econbiz.de/10012470122
New security designs, improvements in computer telecommunications technology and advances in the theory of finance have led to revolutionary changes in the structure of financial markets and institutions. This paper provides a functional perspective on the dynamics of institutional change and...
Persistent link: https://www.econbiz.de/10012473791
may threaten financial stability by increasing bank failures and by increasing the incentives for banks to take on more … financial stability and strengthen the banking system is to adopt a system of structured bank capital requirements with early …
Persistent link: https://www.econbiz.de/10012473905
quasi-exogenous increases in bank size in postwar Germany. I show that firms did not grow faster after their relationship …, but worked with riskier borrowers. Bank managers benefited through higher salaries and media attention. The paper presents …
Persistent link: https://www.econbiz.de/10012533316
A bank or other financial institution is potentially subject to at least four types of risk: (1) Credit risk …. This paper reports a study of the interest-rate elasticity of the net worth of a commercial bank. Most of the study is … devoted to the development of the necessary methodology to measure the interest-rate elasticity (IRE) of a bank's asset …
Persistent link: https://www.econbiz.de/10012478883
bank supervision and eventually produce banking crisis. For political reasons, most countries establish a regulatory … culture that embraces three economically contradictory elements: politically directed subsidies to selected bank borrowers …
Persistent link: https://www.econbiz.de/10012464752
Defects in the corporate governance of government-owned enterprises tempt opportunistic officials to breach duties of public stewardship. Corporate-governance theory suggests that incentive-based deferred compensation could intensify the force that common-law duties actually exert on regulatory...
Persistent link: https://www.econbiz.de/10012470321
Regulation consists of rulemaking and enforcement. Economic theory offers two complementary rationales for regulating financial institutions. Altruistic public-benefits theories treat rules as governmental instruments for increas- ing fairness and efficiency across society as a whole....
Persistent link: https://www.econbiz.de/10012472798