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Unintended Consequences of LOLR Facilities : The Case of Illiquid Leverage

Acharya, Viral V. - 2013

While the direct effect of lender-of-last-resort (LOLR) facilities is to forestall the default of financial firms that lose funding liquidity, an indirect effect is to allow these firms to minimize deleveraging sales of illiquid assets. This unintended consequence of LOLR facilities manifests...

Persistent link: https://www.econbiz.de/10013072305

Testing Macroprudential Stress Tests : The Risk of Regulatory Risk Weights

Acharya, Viral V. - 2015

Macroprudential stress tests have been employed by regulators in the United States and Europe to assess and address the solvency condition of financial firms in adverse macroeconomic scenarios. Financial institutions are required to maintain a capital cushion against such events and stress tests...

Persistent link: https://www.econbiz.de/10013035758

Real Effects of the Sovereign Debt Crisis in Europe : Evidence from Syndicated Loans

Acharya, Viral V. - 2018

banks. Our estimates suggest that the credit crunch explains between one-fifth and one-half of the overall negative real …

Persistent link: https://www.econbiz.de/10012937243

Economics with Market Liquidity Risk

Acharya, Viral V. - 2020

For markets to work efficiently, buyers and sellers must be able to transact easily. People must have access to a marketplace such as a supermarket or a stock exchange with adequate liquidity. Further, people must have confidence that such a well-functioning marketplace will also exist in the...

Persistent link: https://www.econbiz.de/10012847877

Climate Stress Testing

Acharya, Viral V.; Berner, Richard; Engle, Robert; … - 2023

We explore the design of climate stress tests to assess and manage macro-prudential risks from climate change in the financial sector. We review the climate stress scenarios currently employed by regulators, highlighting the need to (i) consider many transition risks as dynamic policy choices;...

Persistent link: https://www.econbiz.de/10014290255

Limits to arbitrage and hedging: Evidence from commodity markets

Acharya, Viral V.; Lochstoer, Lars A.; Ramadorai, Tarun - In: Journal of Financial Economics 109 (2013) 2, pp. 441-465

We build an equilibrium model of commodity markets in which speculators are capital constrained, and commodity producers have hedging demands for commodity futures. Increases in producers' hedging demand or speculators' capital constraints increase hedging costs via price-pressure on futures....

Persistent link: https://www.econbiz.de/10010678703

When is Sovereign Debt Odious? A Theory of Government Repression, Growth Traps, and Growth Boosts

Acharya, Viral V.; Rajan, Raghuram Govind; Shim, Jack - 2022

We examine the dynamics of a country’s growth, consumption, and sovereign debt, assuming that the government is myopic … and wants to maximize short-term, self-interested spending. Surprisingly, government myopia can increase a country …’s access to external borrowing. In turn, access to borrowing can extend the government’s effective horizon; the government …

Persistent link: https://www.econbiz.de/10014078840

Climate Stress Testing

Acharya, Viral V.; Berner, Richard B.; Engle, Robert F.; … - 2023

Persistent link: https://www.econbiz.de/10014358374

When is Sovereign Debt Odious? A Theory of Government Repression, Growth Traps, and Growth Boosts

Acharya, Viral V.; Rajan, Raghuram Govind; Shim, Jack - National Bureau of Economic Research - 2022

We examine the dynamics of a country's growth, consumption, and sovereign debt, assuming that the government is myopic … and wants to maximize short-term, self-interested spending. Surprisingly, government myopia can increase a country …'s access to external borrowing. In turn, access to borrowing can extend the government's effective horizon; the government …

Persistent link: https://www.econbiz.de/10013334513

Climate Stress Testing

Acharya, Viral V.; Berner, Richard B.; Engle, Robert F.; … - 2023

Persistent link: https://www.econbiz.de/10014249918