Showing 1 - 10 of 1,264
We model the impact of bank mergers on loan competition, banks' reserve holdings and aggregate liquidity. Banks compete in a differentiated loan market, hold reserves against liquidity shocks, and refinance in the interbank market. A merger creates an internal money market that induces financial...
Persistent link: https://www.econbiz.de/10009635892
Persistent link: https://www.econbiz.de/10002093454
We construct a model of a bank's optimal funding choice, where the bank negotiates with both safety-driven short-term bondholders and (mostly) risk-taking long-term bondholders. We establish that investor demands for safety create a negative relationship between the bank's capital choices and...
Persistent link: https://www.econbiz.de/10014048751
Short-term debt is commonly used to fund illiquid assets. A conventional view asserts that such arrangements are run-prone in part because redemptions must be processed on a first-come, first-served basis. This sequential service protocol, however, appears absent in the wholesale banking...
Persistent link: https://www.econbiz.de/10014048855
This paper investigates the ex-ante determinants of bank loan securitization by using different econometric methods on Italian individual bank data from 2000 to 2006. Our results show that bank loan securitization is a composite decision. Banks that are less capitalized, less profitable, less...
Persistent link: https://www.econbiz.de/10014195403
To combat the financial crisis that intensified in the fall of 2008, the Federal Reserve injected a substantial amount of liquidity into the banking system. The resulting increase in reserve balances exerted downward price pressure in the federal funds market, and the effective federal funds...
Persistent link: https://www.econbiz.de/10014199622
In September 2007, Northern Rock - the fifth largest mortgage lender in the UK - experienced an old-fashioned bank run, the first bank run in the UK since the collapse of City of Glasgow Bank in 1878. The run had been contained by the bailout announcement of the government that guaranteed all...
Persistent link: https://www.econbiz.de/10014219524
The US Basel III Final Rule was issued by the Banking Agencies (Fed, OCC and FDIC) in July 2013. The Rule implements the international Basel III framework defined by the Basel Committee on Banking Supervision and represents a major overhaul of the US banks’ capital requirements, since the...
Persistent link: https://www.econbiz.de/10014144607
We study the role of reporting rules in the context of bank runs. In our model, a financial institution receives an early but imprecise estimate of the performance of its investment and issues a report subject to a reporting rule. We find that, from a financial-stability standpoint, the optimal...
Persistent link: https://www.econbiz.de/10013250288
How should regulators design effective emergency lending facilities to mitigate stigma during a financial crisis? I explore this question using data from an unexpected disclosure of partial lists of banks that secretly borrowed from the lender of last resort during the Great Depression. I find...
Persistent link: https://www.econbiz.de/10013003743