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non-bank financial intermediaries
Acharya, Viral V.; Cetorelli, Nicola; Tuckman, Bruce - National Bureau of Economic Research - 2024
In recent years, assets of non-bank financial intermediaries (NBFIs) have grown significantly relative to those of …. We argue instead that NBFI and bank businesses and risks are so interwoven that they are better described as having … contingent liquidity risk from the provision of credit lines to NBFIs; and (iii) Empirical work confirms bank-NBFI linkages …
Persistent link: https://www.econbiz.de/10014528356
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Risk-sharing and the creation of systemic risk
Acharya, Viral V.; Iyer, Aaditya M.; Sundaram, Rangarajan K. - In: Journal of Risk and Financial Management 13 (2020) 8, pp. 1-18
We address the paradox that financial innovations aimed at risk-sharing appear to have made the world riskier. Financial innovations facilitate hedging idiosyncratic risks among agents; however, aggregate risks can be hedged only with liquid assets. When risk-sharing is primitive, agents...
Persistent link: https://www.econbiz.de/10012611389
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Robust capital regulation
Acharya, Viral V.; Mehran, Hamid; Schuermann, Til; … - 2011
Banks' leverage choices represent a delicate balancing act. Credit discipline argues for more leverage, while balance-sheet opacity and ease of asset substitution argue for less. Meanwhile, regulatory safety nets promote ex post financial stability, but also create perverse incentives for banks...
Persistent link: https://www.econbiz.de/10008987101
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Robust Capital Regulation
Acharya, Viral V. - 2011
Banks' leverage choices represent a delicate balancing act. Credit discipline argues for more leverage, while balance-sheet opacity and ease of asset substitution argue for less. Meanwhile, regulatory safety nets promote ex post financial stability, but also create perverse incentives for banks...
Persistent link: https://www.econbiz.de/10013126071
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Analyzing Systemic Risk of the European Banking Sector
Acharya, Viral V. - 2012
Since the summer of 2007, the financial system has faced two major systemic crises. European banks have been at the center of both crises, particularly of the European sovereign debt crisis. This article analyzes systemic risk of European banks across both crises exploiting the specific...
Persistent link: https://www.econbiz.de/10013100403
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Lending Implications of U.S. Bank Stress Tests : Costs or Benefits?
Acharya, Viral V. - 2017
The U.S. bank stress tests aim to improve financial system stability. However, they may also affect bank credit supply …
Persistent link: https://www.econbiz.de/10012955765
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Bank Use of Sovereign CDS in the Eurozone Crisis : Hedging and Risk Incentives
Acharya, Viral V. - 2019
protection selling in CDS, the effect being weaker when sovereign risk is high. Bank and country risk variables are mostly not … building a complete picture and understanding fully the economic drivers of the bank-sovereign nexus of risk …
Persistent link: https://www.econbiz.de/10012898392
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Bank Lines of Credit as Contingent Liquidity : Covenant Violations and Their Implications
Acharya, Viral V. - 2017
We examine the relation between the financial health of banks and their willingness to supply capital to borrowers under previously committed credit lines. We show that during the collapse of the Asset Backed Commercial Paper market in the last quarter of 2007 and the first half of 2008, banks...
Persistent link: https://www.econbiz.de/10012945607
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Cash Holdings and Bank Compensation
Acharya, Viral V. - 2017
rewards managers for pursuing risky strategies but fails to exact penalties for decision making that leads to bank failures …
Persistent link: https://www.econbiz.de/10012968378
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Bank Lines of Credit as Contingent Liquidity : A Study of Covenant Violations and Their Implications
Acharya, Viral V. - 2014
We study how the consequences of violations of covenants associated with bank lines of credit to firms vary with the … the heart of a new bank liquidity channel. This channel complements the traditional bank lending channel, which focuses on …
Persistent link: https://www.econbiz.de/10013051172