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Credit availability in the crisis : which role for the European Investment Bank Group?
Fedele, Alessandro; Mantovani, Andrea; Liucci, Francesco - 2010
In this paper we consider a moral hazard problem between a creditworthy firm which needs funding and a bank. We first study under which conditions the firm does not obtain the loan. We then determine whether and how the intervention of an external financial institution can facilitate the access...
Persistent link: https://www.econbiz.de/10011739813
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Securitization and moral hazard : evidence from a lender cutoff rule
Bubb, Ryan; Kaufman, Alex - 2009
Credit score cutoff rules result in very similar potential borrowers being treated differently by mortgage lenders. Recent research has used variation induced by these rules to investigate the connection between securitization and lender moral hazard in the recent financial crisis. However, the...
Persistent link: https://www.econbiz.de/10003941871
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Central bank screening, moral hazard, and the lender of last resort policy
Li, Mei; Milne, Frank; Qiu, Junfeng - 2013
This paper establishes a theoretical model to examine the LOLR policy when a central bank cannot distinguish between solvent and insolvent banks. We study two cases: a case where the central bank cannot screen insolvent banks and a case where the central bank can only imperfectly screen...
Persistent link: https://www.econbiz.de/10009790246
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Securitization and moral hazard : evidence from credit score cutoff rules
Bubb, Ryan; Kaufman, Alex - 2011 - This version: August 30, 2011
Mortgage originators use credit score cutoff rules to determine how carefully to screen loan applicants. Recent research has hypothesized that these cutoff rules result from a securitization rule of thumb. Under this theory, an observed jump in defaults at the cutoff would imply that...
Persistent link: https://www.econbiz.de/10009298472
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The limits of Central Counterparty Clearing : collusive moral hazard and market liquidity
Koeppl, Thorsten V. - 2013
Can central counterparty (CCP) clearing control counterparty risk in the presence of risk taking that can aggravate … such risk? When counterparty risk is not observable, I show that central clearing leads to higher collateral requirements … for two different reasons. Without collusion about risk taking, a CCP offering diversification of risk cannot selectively …
Persistent link: https://www.econbiz.de/10009778596
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Interbank network as a channel of credit contagion in banks : is moral hazard transferable?
Jović, Željko; Đaković, Milena Lutovac - In: Journal of central banking theory and practice 11 (2022) 3, pp. 117-135
The objective of this research is to examine the inter-bank network of clients as a channel for credit risk … transmission by groups of banks in Serbia characterized by different levels of credit risk (clusters). Two of the four observed …. The third group of banks (banks with high levels of credit risk) takes over the effects of systemic factors and transfers …
Persistent link: https://www.econbiz.de/10013407507
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Securitization and Moral Hazard : Evidence from Credit Score Cutoff Rules
Bubb, Ryan - 2013
A growing literature exploits credit score cutoff rules used by mortgage lenders as a natural experiment to estimate the moral hazard effect of securitization on underwriting. This research design is premised on the assumption that these cutoff rules are a response by lenders to securitization...
Persistent link: https://www.econbiz.de/10013095622
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Catalytic Finance: When Does It Work?
Morris, Stephen; Shin, Hyun Song - Cowles Foundation for Research in Economics, Yale University - 2003
In a simple model of currency crises caused by creditor coordination failure, we show that bailouts that reduce ex post inefficiency will sometimes create ex ante moral hazard but will sometimes enhance the incentives for governments to take preventative actions. This model helps us understand a...
Persistent link: https://www.econbiz.de/10005087386
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Сучасні моделі фінансових криз
Petrushchak, Bohdan - Volkswirtschaftliche Fakultät, … - 2010
The theoretical aspects of three generation of financial crisis’ models are analyzed. On the basis of retrospective analysis of these models are determined the main causes than make the economic misbalance more profound and than cause a crisis. Проаналізовано теоретичні...
Persistent link: https://www.econbiz.de/10008927055
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Risk sharing in the presence of a public good
Schroth, Josef - 2015
This paper studies an economy where agents can spend resources on consuming a private good and on funding a public good. There is asymmetric information regarding agents' relative preference for private versus public good consumption. I show how private good consumption should be coordinated...
Persistent link: https://www.econbiz.de/10011302006