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This note considers the role debt-equity conversions and NPL securitization can play in addressing excessive corporate debt in China, and the corresponding burden on banks of impaired assets. It finds that such techniques can play a role, but getting their design right is critical, as is nesting...
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decrease a bank's incentive to take risk with its remaining ineligible assets. A greater capacity to respond to liquidity … stress increases the potential profits a bank would put at stake by making risky investments, but it also mitigates the … illiquidity disadvantages of holding risky assets. We then empirically estimate the effect of two liquidity regulations on bank …
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This paper studies the role of non-performing loans in the regulatory measures of the Chinese commercial banking system. A threshold panel regression model has been applied to the data of 87 commercial banks in China from 2006 to 2012. The empirical results suggest that a higher non-performing...
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expectations for NPLs are found to be effective in reducing banks' NPLs. The phase-in of the policies can temporarily reduce bank …
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natural experiment to study the effects of reduced bank capital adequacy on productivity. Affected banks respond not only by …
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Banking system uses this practice of divergence in reporting bad loans and their provisioning with the hope that those bad loan accounts would turn into standard assets over time. However with the help of this practice, the real financial positions of these institutions are withheld for some...
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