Showing 1 - 10 of 3,755
This paper examines the effect of firm crash-risk exposure on the speed of leverage adjustment (SOA), and how this … years 1989 to 2009. We find that firms exposed to a higher crash risk tend to adjust their financial leverage toward their … association between crash-risk exposure and leverage adjustment is attenuated by strong information environments at country level …
Persistent link: https://www.econbiz.de/10013007317
convexity results in a 21% increase in a firm's crash risk after controlling for managerial price-increasing incentives. In … positive jump risk. We exploit an exogenous shock to compensation convexity, arising from a change in the expensing treatment … suggest that managerial equity compensation portfolios do not augment a firm's future idiosyncratic crash risk because they …
Persistent link: https://www.econbiz.de/10013020017
We suggest that banks contribute extensively to systemic risk only if they are both “risky” and centrally placed in the … financial network. To calculate systemic risk we apply the ∆CoVaR measure of Adrian and Brunnermeier (2016) and measure … important determinant of systemic risk but primarily not by its direct effect. Rather, its main influence is to make other firm …
Persistent link: https://www.econbiz.de/10012901962
This study investigates the effect of corporate hedging on stock price crash risk. We test two competing hypotheses …. Under the transparency hypothesis, hedging reduces a firm's information asymmetry and lowers crash risk. Under the opacity … hypothesis, hedging decreases financial reporting quality and increases crash risk. Using a comprehensive sample of firms from …
Persistent link: https://www.econbiz.de/10012909871
stock price crash risk puzzle, for which a sound explanation remains elusive. Our conclusions offer avenues for future …
Persistent link: https://www.econbiz.de/10013243263
a financial system. With a static model on financial institutions' risk-taking behavior, we quantify the impact on … systemic risk in the cross-sectional dimension when imposing a capital requirement. Although imposing a capital requirement can … lower individual risk, it enhances the systemic linkage within the system at the same time. With a proper systemic risk …
Persistent link: https://www.econbiz.de/10013133821
the impact of micro-prudential regulation on the systemic risk in a cross-sectional dimension. We construct a static model … for risk-taking behavior of financial institutions and compare the systemic risks in two cases with and without a capital … requirement regulation. In a system with a capital requirement regulation, the individual risk-taking of the financial …
Persistent link: https://www.econbiz.de/10013119229
What is the effect of financial crises and their resolution on banks' choice of liquidity? When banks have relative expertise in employing risky assets, the market for these assets clears only at fire-sale prices following a large number of bank failures. The gains from acquiring assets at...
Persistent link: https://www.econbiz.de/10013148772
Persistent link: https://www.econbiz.de/10013150594
The paper investigates the role of CEO's equity and risk incentives in boosting securitization in the financial … industry and in motivating executives to reduce the perceived risk while betting on it. Using a sample of US financial … securitization transactions to a larger extent than CEOs with low incentives. We also show that CEOs with high equity and risk …
Persistent link: https://www.econbiz.de/10013086514