The financial crises emanating from bank run, bad debt, asset-liability mismatch, excessive leverage, sovereign default that result in bank failure have not been solved. In order to solve these problems, banks adopted several models even though each banking business model was a catalyst for...

Using a firm-bank panel of more than 1m German firms over 2010-2016, we document that local public bank lending to municipalities crowds out private investment. Our results show how crowding-out can happen in a developed economy characterized by low interest rates and fiscal austerity. Our...

Over 2010-2016, municipal debt in Germany crowded out private investment worth 1 percent of GDP. Forced to lend to municipalities by their statutes, local public banks compensated for declining municipal-debt yields by charging higher rates to firms in Germany’s locally segmented credit...

In emerging Asia, banks constitute the dominant source of financing consumption and investment, and bank balance sheets comprise large gross FX assets and liabilities. This paper extends the DSGE model of Gertler and Karadi (2011) to incorporate these key features and estimates a panel vector...

This paper uses branching and interstate banking deregulation as a natural experiment to explore the effect of agency cost on the use of bank loan commitments. A simple inventory-based model shows that lower agency cost facilitates more issuance of loan commitments because lower agency cost...

In a move towards effective management of interest rate risk in Indian banking, in addition to the existing return on Interest Rate Sensitivity under Traditional Gap Analysis, a new return is being introduced to monitor the interest rate risk using Duration Gap Analysis (DGA), called Interest...

Digitalization and Blockchain have fundamentally transformed the structure of the monetary system. The first wave of cryptocurrencies such as Bitcoin, Ethereum or Ripple have failed to gain relevance in terms of their share in monetary transactions. This was due to systemic deficiencies leading...

This paper examines relevancy of corporate financial policies and documents similarities and/or differences of how profit maximization goal is viewed by Islamic banking institutions (IBIs). Management of the firm is ultimately responsible for maximizing profits and increasing shareholder value,...

During the Global Financial Crisis, banks suffered losses on a scale not witnessed since the Great Depression, partly due to two major structural developments in the banking industry; deregulation combined with financial innovation. In the aftermath of the financial crisis, the regulatory...

Using a large contract-level, high frequency database of bank loan commitments from June 2007 to May 2009, we fi nd that fi rms' takedown behavior regarding credit lines is very di erent depending on the fi rms' creditworthiness. Usage patterns of rms with poor credit quality are more closely...