Showing 1 - 10 of 11,697
This paper studies the effect of bank competition on the optimal use of monetary and macroprudential policies. To this end, I develop a New Keynesian DSGE model with collateral constraints and an imperfect competitive banking sector. The results from the model demonstrate that the degree of...
Persistent link: https://www.econbiz.de/10012840568
fire sale externalities, overinvest in risky assets and underinvest in liquid assets in the competitive equilibrium …
Persistent link: https://www.econbiz.de/10012902413
characterized by fire sale externalities. In the model, banks can insure against potential liquidity shocks by hoarding sufficient …
Persistent link: https://www.econbiz.de/10011500208
characterized by fire sale externalities. In the model, banks can insure against potential liquidity shocks by hoarding sufficient …
Persistent link: https://www.econbiz.de/10013210384
This paper studies how financial intermediation varies across banks. Bank size is a first-order determinant of banks' capital structure in the cross-section. Largest banks have the lowest capital-to-asset ratio and the lowest ratio of Tier-1 capital against risk-weighted assets. These large...
Persistent link: https://www.econbiz.de/10012849874
This paper checks how international spillovers of shocks and policies are modified when banks are foreign owned. To this end we build a two country macroeconomic model with banking sectors that are owned by residents of one (big and foreign) country. Consistently with empirical findings, we find...
Persistent link: https://www.econbiz.de/10012987484
Under Basel III rules, banks became subject to a liquidity coverage ratio (LCR) from 2015 onward, to promote short-term resilience. Investigating the effects of such liquidity regulation on bank balance sheets, we find (i) cointegration of liquid assets and liabilities, to maintain a short-term...
Persistent link: https://www.econbiz.de/10012951540
This study examines the impact of strengthening bank capital supervision on bank behavior in the incomplete and complete enforcement of regulations. In a dynamic model of banks facing idiosyncratic shocks, banks accumulate regulatory capital and decrease charter value and lending in the short...
Persistent link: https://www.econbiz.de/10012835563
Recent empirical studies have documented two remarkable patterns shown by euro area banks in the aftermath of the Great Recession: (i) their tendency to boost capital ratios by shrinking assets (contraction of loans supply), and (ii) their reluctance to cut back on dividends (fall in retained...
Persistent link: https://www.econbiz.de/10012241228
The paper investigates the effectiveness of dividend-based macroprudential rules in complementing capital requirements to promote bank soundness and sustained lending over the cycle. First, some evidence on bank dividends and earnings in the euro area is presented. When shocks hit their profits,...
Persistent link: https://www.econbiz.de/10012024523