This paper explores the ability of financial analysts to gauge the risk taken by banks and investigates the impact of the recent financial crisis. Using a sample of 36,343 analyst forecasts issued for 411 European banks over 2003-2009 we find that analyst forecasts are influenced by risk, the...

Based on a sample of mid-tier and top-tier internationally active banks with five-year senior CDS spreads, this paper investigates the determinants of CDS spreads and whether CDS spreads can be considered a good proxy of bank risk. The analysis encompasses three time periods: a pre-crisis period...

The bankruptcy of Lehman Brothers in September 2008 and, shortly afterwards, the near downfall of the insurance conglomerate American International Group (AIG), both of which were heavily involved in the CDS sector, polarised attention towards the CDS activities of the major international banks....

Theory suggests that securitization provides financial institutions with an opportunity to lower the cost of funding; improve credit risk management and increase profitability. In practice, as evidence during the recent crisis, it might lead to adverse consequences through a number of indirect...