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Costless Capital Requirements
Flore, Raphael - 2017
Trade-off theories of capital structure describe how a firm chooses its leverage for a given set of assets. This paper studies how the predictions of such trade-off theories change if one accounts for the possibility that firms can invest in financial markets. In that case, the set of available...
Persistent link: https://www.econbiz.de/10012954868
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Coco design, risk shifting and financial fragility
Chan, Stephanie; Wijnbergen, Sweder van - 2016 - This version: January 28, 2016
We highlight the ex ante risk-shifting incentives faced by a bank's shareholders/managers when CoCos (contingent … shareholders will receive upon the CoCo's conversion under CoCo designs widely used in practice. Specifically we show that for …
Persistent link: https://www.econbiz.de/10011441586
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When uncertainty decouples expected and unexpected losses
Juselius, Mikael; Tarashev, Nikola A. - 2022
A parsimonious extension of a well-known portfolio credit-risk model allows us to study a salient stylized fact - abrupt switches between high- and low-loss phases - from a risk-management perspective. As uncertainty about phase switches increases, expected losses decouple from unexpected...
Persistent link: https://www.econbiz.de/10012814386
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Integration Among US Banks
Anand, Abhinav - 2020
continues to rise unabated. Among characteristics associated with integration, we find that bank size is the most significant …
Persistent link: https://www.econbiz.de/10012847580
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Integration Among US Banks
Anand, Abhinav - 2020
median US bank's integration has increased significantly post-2005. During the great recession and the Eurozone crisis …, integration levels among US banks display a significant rise over and above their trend. We find that bank size is the most … association with bank integration while the net interest margin and combined tier 1 and tier 2 capital ratio influence bank …
Persistent link: https://www.econbiz.de/10012847596
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Implications of Optimal Price Regulation in Sub-Prime Banking Markets
Thomas, Darron Anthony - 2010
This paper investigates a model of endogenous product differentiation in subprime lending markets. In the subprime literature the discussion surrounds two competing hypotheses about pricing behavior. The opportunity pricing hypothesis suggests that lenders are rent seeking in their pricing...
Persistent link: https://www.econbiz.de/10013141057
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The political economy of financial systems
Haber, Stephen H.; Perotti, Enrico C. - 2008
This survey reviews the literature on the political economy of financial structure, broadly defined to include the size of capital markets and banking systems as well as the distribution of access to external finance across firms.The theoretical literature on the institutional basis for...
Persistent link: https://www.econbiz.de/10011374399
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A dynamic model of bank behaviour under multiple regulatory constraints
Behn, Markus; Daminato, Claudio; Salleo, Carmelo - 2019
We develop a dynamic structural model of bank behaviour that provides a microeconomic foundation for bank capital and …
Persistent link: https://www.econbiz.de/10011975498
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Bank leverage, welfare, and regulation
Admati, Anat R.; Hellwig, Martin - 2018 - Revised January 14, 2019
it reflects special liquidity benefits of bank debt. Even aside from neglecting the systemic damage to the economy that …
Persistent link: https://www.econbiz.de/10011977827
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Bank capital, liquid reserves, and insolvency risk
Hugonnier, Julien; Morellec, Erwan - 2015
regulatory requirements. Our analytic characterization of the bank policy choices shows that imposing solely liquidity … requirements leads to lower bank losses in default at the cost of an increased likelihood of default. Combining liquidity … requirements with leverage requirements reduces drastically both the likelihood of default and the magnitude of bank losses in …
Persistent link: https://www.econbiz.de/10011293576