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Risk-based pricing in competitive lending markets
Müller, Carola; Juelsrud, Ragnar Enger; Andersen, Henrik - 2021
We use unique data on banks' private risk assessments of corporate borrowers to quantify how competition among banks affect the risk sensitivity of interest rates in the Norwegian credit market. We show that an increase in competition makes corporate lending rates less sensitive to banks' own...
Persistent link: https://www.econbiz.de/10013373828
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Bank leverage ratios and financial stability: A micro- and macroprudential perspective
Avgouleas, Emilios - 2015
Bank leverage ratios have made an impressive and largely unopposed return; they are mostly used alongside risk … straightforward real estate loans. Bank leverage ratios are primarily seen as a microprudential measure that intends to increase bank … leverage ratios should also be viewed as a key part of the macroprudential framework. In this context, this paper discusses the …
Persistent link: https://www.econbiz.de/10011545309
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Private Bank Money vs Central Bank Money: A Historical Lesson for CBDC Introduction
Grodecka-Messi, Anna - 2019
In this paper, a unique event is studied: the opening of Bank of Canada in 1935, the central bank note issuance monopoly and its impact on the note issuing chartered banks. Between 1935-1950, Canadian chartered banks had to gradually withdraw their notes from circulation. In a...
Persistent link: https://www.econbiz.de/10013208862
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Bank Capital, Liquidity and Systemic Risk
Eichberger, Juergen; Summer, Martin - 2004
We analyze the impact of capital adequacy regulation on bank insolvency and aggregate investment. We develop a model of the banking system that is characterized by the interaction of many heterogeneous banks with the real sector, interbank credit relations as a consequence of bank liquidity...
Persistent link: https://www.econbiz.de/10013370004
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The Risk-Taking Channel of Monetary Policy in Norway
Karapetyan, Artashes - 2016
We identify the effects of monetary policy on credit risk-taking using a unique dataset covering the population of corporate borrowers in Norway. We find that a lower benchmark interest rate (interbank rates or overnight rates) induces the average bank to grant more loans to risky firms. We also...
Persistent link: https://www.econbiz.de/10012143883
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Central clearing and systemic liquidity risk
King, Thomas; Nesmith, Travis D.; Paulson, Anna Louise; … - 2019
By stepping between bilateral counterparties, a central counterparty (CCP) transforms credit exposure. CCPs generally improve financial stability. Nevertheless, large CCPs are by nature concentrated and interconnected with major global banks. Moreover, although they mitigate credit risk, CCPs...
Persistent link: https://www.econbiz.de/10012429406
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Financial stability considerations for monetary policy: Theoretical mechanisms
Ajello, Andrea; Boyarchenko, Nina; Gourio, François; … - 2022
This paper reviews the theoretical literature at the intersection of macroeconomics and finance to draw lessons on the connection between vulnerabilities in the financial system and the macroeconomy, and on how monetary policy affects that connection. This literature finds that financial...
Persistent link: https://www.econbiz.de/10012888656
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Macroeconomic implications of financial imperfections: A survey
Claessens, Stijn; Kose, M. Ayhan - 2017
This paper surveys the theoretical and empirical literature on the macroeconomic implications of financial imperfections. It focuses on two major channels through which financial imperfections can affect macroeconomic outcomes. The first channel, which operates through the demand side of finance...
Persistent link: https://www.econbiz.de/10012060201
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The risk-taking channel of monetary policy in Macedonia: Evidence from credit registry data
Miteski, Mite; Mitreska, Ana; Vaskov, Mihajlo - 2018
The last global crisis brought the monetary policy risk-taking channel to the fore, arguing that lingering low interest rates might affect not only the quantity, but the quality of credit extended as well. In line with this debate, this paper is the first effort to empirically investigate the...
Persistent link: https://www.econbiz.de/10012109774
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The transmission of financial shocks and leverage of financial institutions: An endogenous regime-switching framework
Hubrich, Kirstin; Waggoner, Daniel F. - 2022
We conduct a novel empirical analysis of the role of leverage of financial institutions for the transmission of … of leverage of financial institutions employing institution-level data and find empirical evidence that real effects of … financial shocks are amplified by the leverage of financial institutions in a financial-constraint regime. We also find evidence …
Persistent link: https://www.econbiz.de/10014278430