This paper purports to provide some evidence on the effect of rating agencies on herding in financial markets. By means of a laboratory experiment, we investigate the effect and interaction between private and public information. Previous experiments showed that lemmings behaviour can survive in...

In the East Asian crisis, connections - with industrial groups or influential families - increased the probability of distress for financial institutions. Connections also made closure more, not less, likely, suggesting that the closure processes themselves were transparent. But larger...

May 2000 - During a systemic financial crisis in Korea, the probability of financial distress was greater for large financial intermediaries (such as commercial banks and merchant banking corporations) than it was for tiny mutual savings and finance companies. Taking the Korean experience as a...

This paper discusses the relation between the financial structure and the determination of bank lending rates in Italy. It notes that the high degree of stickiness of bank lending rates observed in Italy in the past was related to constraints on competition within the banking and financial...

In his ‘Simple model of herd behaviour’, Banerjee (1992) shows that – in a sequential game – if the first two players have chosen the same action, all subsequent players will ignore their own information and start a herd, an irreversible one. The points of strength of Banerjee’s model...