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Is a Stable Financial System Possible?
Turnbull, Shann - 2019
Three conditions are suggested for establishing a stable financial system: 1. Only digital money is used. 2. The Internet of Things (IoT) uses a sustainable service of nature essential to maintain the well being of the environment and humans in each region of the planet to automatically...
Persistent link: https://www.econbiz.de/10012894728
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Is a Stable Financial System Possible?
Turnbull, Shann - 2018
Three conditions are suggested for establishing a stable financial system: 1. Only digital money is used. 2. The Internet of Things (IoT) uses a sustainable service of nature essential to maintain the well being of the environment and humans in each region of the planet to automatically...
Persistent link: https://www.econbiz.de/10012931273
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Do low interest rates sow the seeds of financial crises?
Cociuba, Simona E.; Shukayev, Malik; Ueberfeldt, Alexander - 2011
A view advanced in the aftermath of the late-2000s financial crisis is that lower than optimal interest rates lead to excessive risk taking by financial intermediaries. We evaluate this view in a quantitative dynamic model in which interest rate policy affects risk taking by changing the amount...
Persistent link: https://www.econbiz.de/10009389254
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Why Does Bad News Increase Volatility and Decrease Leverage?
Fostel, Ana - 2011
A recent literature shows how an increase in volatility reduces leverage. However, in order to explain pro-cyclical leverage it assumes that bad news increases volatility, that is, it assumes an inverse relationship between first and second moments of asset returns. This paper suggests a reason...
Persistent link: https://www.econbiz.de/10013130738
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Why Does Bad News Increase Volatility and Decrease Leverage?
Fostel, Ana - 2011
A recent literature shows how an increase in volatility reduces leverage. However, in order to explain pro-cyclical leverage it assumes that bad news increases volatility, that is, it assumes an inverse relationship between first and second moments of asset returns. This paper suggests a reason...
Persistent link: https://www.econbiz.de/10013121405
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Securitization and aggregate investment efficiency
Mirza, Afrasiab; Stephens, Eric - 2016
This paper studies the welfare properties of competitive equilibria in an economy with incomplete markets subject to idiosyncratic and aggregate shocks. We focus on the role of securitization, whereby borrowers can reduce idiosyncratic asset risk, which enables increased leverage and investment....
Persistent link: https://www.econbiz.de/10012010374
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The economics of instability : an abstract of an excerpt
Veneroso, Frank - 2018
The dominant postwar tradition in economics assumes the utility maximization of economic agents drives markets toward stable equilibrium positions. In such a world there should be no endogenous asset bubbles and untenable levels of private indebtedness. But there are. There is a competing...
Persistent link: https://www.econbiz.de/10011824161
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Why Does Bad News Increase Volatility and Decrease Leverage?
Fostel, Ana - 2010
The literature on leverage until now shows how an increase in volatility reduces leverage. However, in order to explain pro-cyclical leverage it assumes that bad news increases volatility. This paper suggests a reason why bad news is more often than not associated with higher future volatility....
Persistent link: https://www.econbiz.de/10013141101
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The benefits and costs of renminbi internationalization
Zhang, Liqing; Tao, Kunyu - 2014
Despite the increasing recognition that the renminbi (RMB) may eventually become a key global currency, several … firms in the People's Republic of China. The costs include general costs, which complicate monetary policy and exchange rate …
Persistent link: https://www.econbiz.de/10010355227
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The Chinese Offshore Renminbi Currency and Bond Markets : The Role of Hong Kong
Fung, Hung-Gay - 2012
This paper discusses the role of Hong Kong in China's grand scheme to build up the RMB as a global reserve currency. We … highlight the economic importance of Hong Kong to China in terms of channeling foreign direct investment into China, some of … which, in the future, will be denominated in the RMB. We discuss the development of China's RMB currency swap and deposit …
Persistent link: https://www.econbiz.de/10013108053