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The costs and benefits of liquidity regulations : lessons from an idle monetary policy tool

Curfman, Christopher J.; Kandrac, John - 2019

We investigate how liquidity regulations affect banks by examining a dormant monetary policy tool that functions as a liquidity regulation. Our identification strategy uses a regression kink design that relies on the variation in a marginal high-quality liquid asset (HQLA) requirement around an...

Persistent link: https://www.econbiz.de/10012181216

Elections hinder firms' access to credit

Léon, Florian; Weill, Laurent - 2022

To analyze whether the occurrence of elections affects access to credit for firms, we perform an investigation using … firm-level data covering 44 developed and developing countries. The results show that elections impair access to credit …. Specifically, firms are more credit-constrained in election years and pre-election years as elections exacerbate political …

Persistent link: https://www.econbiz.de/10012819438

Do better political institutions help in reducing political pressure on state-owned banks? : evidence from developing countries

Ashraf, Badar Nadeem; Arshad, Sidra; Yan, Liang - In: Journal of risk and financial management : JRFM 11 (2018) 3, pp. 1-10

This study examines whether state-owned banks face political pressure and whether the improvement in political institutions alleviates this pressure. The theory of political benefits argues that politicians use state-owned banks for political purposes such as obtaining and maintaining political...

Persistent link: https://www.econbiz.de/10011895721

Does Basel Save Our Banks? The Effect of Basel I Capital Requirements on Bank Failures

Gay, Sebastien; Bergkamp, Balthazar D. - 2015

We develop an empirical model to test the relation between compliance with Basel I capital requirements and the probability of bank failure during ‘normal’ economic conditions and times of financial crises. We also seek to determine whether increased capital requirements would further reduce...

Persistent link: https://www.econbiz.de/10014134525

Loss Given Default for Commercial Loans at Failed Banks

Shibut, Lynn - 2016

This paper extends what we know about loss given default (LGD) on commercial loans by studying certain types of these loans that have been excluded from previous research but that may be more representative of loans held by small and mid-sized banks. We use a newly available dataset on...

Persistent link: https://www.econbiz.de/10013002186

Credit Risk Transfer and Bank Insolvency Risk

van Oordt, Maarten R.C. - 2017

The present paper shows that, everything else equal, some transactions to transfer portfolio credit risk to third-party investors increase the insolvency risk of banks. This is in particular likely if a bank sells the senior tranche and retains a sufficiently large first-loss position. The...

Persistent link: https://www.econbiz.de/10012946544

Failed Bank Asset Recovery : The Influence of Deposits and Loan Exposure

Qu, Shisheng - 2017

Asset recovery rate is a key factor for credit investors. This study explores the determinants of bank asset recovery rates during the recent downturn in the real estate sector and subsequent financial crisis. We find that banks relying on brokered deposit realize lower asset recovery rates....

Persistent link: https://www.econbiz.de/10012954883

Loan guarantees, bank underwriting policies and financial fragility

Carletti, Elena; Leonello, Agnese; Marquez, Robert - 2023

Loan guarantees represent a form of government intervention to support bank lending. However, their use raises concerns as to their effect on bank risk-taking incentives. In a model of financial fragility that incorporates bank capital and a bank incentive problem, we show that loan guarantees...

Persistent link: https://www.econbiz.de/10013553424

Screening and Loan Origination Time : Lending Standards, Loan Defaults and Bank Failures

Bedayo, Mikel; Jiménez, Gabriel; Peydró, José-Luis; … - 2021

We show that loan origination time is key for bank lending standards, cycles, defaults and failures. We exploit the credit register from Spain, with the time of a loan application and its granting. When VIX is lower (booms), banks shorten loan origination time, especially to riskier firms. Bank...

Persistent link: https://www.econbiz.de/10013247552

Credit risk transfer and bank insolvency risk

Oordt, Maarten R. C. van - 2017

The present paper shows that, everything else equal, some transactions to transfer portfolio credit risk to third-party investors increase the insolvency risk of banks. This is particularly likely if a bank sells the senior tranche and retains a sufficiently large firstloss position. The results...

Persistent link: https://www.econbiz.de/10011777803