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Securitization and aggregate investment efficiency

Mirza, Afrasiab; Stephens, Eric - 2016

, which enables increased leverage and investment. In the absence of frictions in the securitization process, we show that the … be constrained inefficient due to the existence of a pecuniary externality that can result in over or under-investment …. We examine policies to correct over-investment and find that a leverage ratio restriction generates a Pareto improvement …

Persistent link: https://www.econbiz.de/10012010374

Government as Rescue Financier : Not Just a Private Lender

Heimowitz, Marc - 2017

narrow rescue investment. It concludes that the insertion of non-commercial behavior into what typically is an economic …

Persistent link: https://www.econbiz.de/10012963450

Credit availability in the crisis : which role for the European Investment Bank Group?

Fedele, Alessandro; Mantovani, Andrea; Liucci, Francesco - 2010

external financial institution can facilitate the access to credit. In particular, we focus on the European Investment Bank …

Persistent link: https://www.econbiz.de/10011739813

Moral hazard effects of bailing out under asymmetric information

Mundaca, B. Gabriela - 2002

With a four-stage sequential game model, we study how bailouts ameliorate the effects of liquidation on fundamentals, reduce the likelihood of currency crises and affect the financial sector's (non-observable) effort. In stage 1, exchange rate regime is announced and all agents receive...

Persistent link: https://www.econbiz.de/10001703687

Micro-Level Evidence on the Role of Moral Hazard in the Asian Financial Crisis : Analysis of Malasya, Philippines, Korea and Thailand

Honig, Adam; Jain-Chandra, Sonali - 2008

This article examines the role of government guarantees to domestic banks in generating moral hazard in pre-crisis East Asian economies. We test for moral hazard among bank creditors by determining whether protected banks received more funds from creditors than otherwise identical banks that did...

Persistent link: https://www.econbiz.de/10014215484

Bailouts, Moral Hazard and Banks' Home Bias for Sovereign Debt

Gaballo, Gaetano - 2017

We show that an increase in banks' holdings of domestic Sovereign debt decreases the ability of domestic Sovereigns to successfully enact bailouts. When Sovereigns finance bailouts with newly issued debt and the price of Sovereign debt is sensitive to unanticipated debt issues, then bailouts...

Persistent link: https://www.econbiz.de/10012969163

Bailouts, Moral Hazard and Banks’ Home Bias for Sovereign Debt

Gaballo, Gaetano - 2017

This paper shows that an increase in banks' holdings of domestic sovereign debt decreases the ability of domestic sovereigns to successfully enact bailouts. When sovereigns finance bailouts with newly issued debt and the price of sovereign debt is sensitive to unanticipated debt issues, then...

Persistent link: https://www.econbiz.de/10012950574

Shadow Banking, Sovereign Risk and Collective Moral Hazard

di Iasio, Giovanni - 2013

The paper shows that the time-consistent policy of public bailout affects the private liquidity choice of banks in several ways. First, banks anticipate public support in a liquidity crisis and seek large and socially inefficient exposures to shadow banking, defined as a privately costly...

Persistent link: https://www.econbiz.de/10013090993

Collective Moral Hazard, Maturity Mismatch and Systemic Bailouts

Farhi, Emmanuel - 2009

The paper elicits a mechanism by which private leverage choices exhibit strategic complementarities through the reaction of monetary policy. When everyone engages in maturity transformation, authorities haver little choice but facilitating refinancing. In turn, refusing to adopt a risky balance...

Persistent link: https://www.econbiz.de/10013158408

Liquidity risk and monetary policy

Sauer, Stephan - 2007

This paper provides a framework to analyse emergency liquidity assistance of central banks on financial markets in response to aggregate and idiosyncratic liquidity shocks. The model combines the microeconomic view of liquidity as the ability to sell assets quickly and at low costs and the...

Persistent link: https://www.econbiz.de/10003951417