First externalities risk due to the size of the companies or the principle that large companies are also at risk of bankruptcy (too big to fail) are examined. The problem is illustrated by a case in which extreme risks with negative consequences for savers and investors are taken. If we...

Borrowing decisions affect most households, with large stakes and implications for subfields as varied as macroeconomics and industrial organization. I review theoretical and empirical work on household debt: its prevalence, level, growth, and composition, as well as various measures of consumer...

This introduces the symposium on financial economics.

Financially constrained borrowers have the incentive to influence the appraisal process in order to increase borrowing or reduce the interest rate. We document that the average valuation bias for residential refinance transactions is above 5%. The bias is larger for highly leveraged...

Rating is a mark given by a rating agency to the debt of a banking company according to its capability to honour on due term the financial obligations resulting from this debt. The use of ratings is encouraged by the new banking prudential regulations issued on international market (Basel II...

The Basel II implementation supposes a series of important challenges both for the credit institutions – the adjusting of the risk management and of the data processing system, the training of the personnel, the obtaining of the data bases etc. – and also for the National Bank of Romania –...

This paper documents the major trends in debt (bank and bond) markets in emerging economies since the early 1990s, when these markets started expanding. The paper shows that banks have increased in size in most emerging economies though from low bases. But bond markets have expanded even more,...

Credit risk has been a worrying type of risk for financial managers. Fortunately, a recent market development –credit derivatives- has made the credit risk more manageable. The loan portfolio management has become more practicable than it used to be in the past. However, credit derivatives are...

The financial crisis prompted closer supervision of securitisation as a mechanism for refinancing the economy. In France the principal underlying assets of securitisations are bank loans and credits to resident households and non-financial companies.

This project undertakes an empirical analysis in credit risk modeling using a data sample representative of bank lending to the Czech corporate sector. A rating system is constructed using a proprietary database (Creditreform) that provides a solvency index for a large number of Czech firms....