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Especially structured finance instruments were blamed as main reason for the financial crisis 2007, but the understanding for the motivation to originate securitization products is less discovered. Therefor this paper tries to identify main balance sheet characteristics of structured finance...
Persistent link: https://www.econbiz.de/10008907723
In the wake of the global financial crisis that erupted in 2008, there has been extensive commentary and regulatory focus on the 'Too Big to Fail' issue. In this paper, we survey the proposed solutions and regulatory initiatives that have been undertaken. We conduct a longitudinal analysis of...
Persistent link: https://www.econbiz.de/10012022346
in the banking sectors of various countries. After the 2007-2009 crisis, bank capital requirements have, in some cases … guidelines has contributed to regulatory complexity, even when omitting other bank capital regulations that are specific to the … US, and (3) how the US regulatory measures still do not provide equally valuable information about whether a bank is …
Persistent link: https://www.econbiz.de/10011960612
to partially compensate for the changes resulting from the new rules: On average, if a bank’s capital ratio when measured … under the new rules was lower than under the old rules, then the bank took steps to increase its capital ratio, compared to … a bank whose capital ratio did not change with the new rules. This adjustment took place prior to the publication of the …
Persistent link: https://www.econbiz.de/10013291957
We investigate why only some banks use regulatory arbitrage. We predict that banks wanting to be riskier than allowed by capital regulations (constrained banks) use regulatory arbitrage while others do not. We find support for this hypothesis using trust preferred securities (TPS) issuance, a...
Persistent link: https://www.econbiz.de/10010353295
contributes to the current debate on the optimal scope of bank activities, and highlights novel channels through which …
Persistent link: https://www.econbiz.de/10011518813
The analysis of bank failures enables the understanding of the relevant financial and economic factors underlying the … bank's solvability and survival in a sound and competitive banking system, allowing a preventive behavior for bank …
Persistent link: https://www.econbiz.de/10013002799
This paper argues that creditors reflect the financial-safety-net aspect of bank lobbying, plausibly considering the … connection between bank lobbying and government bailouts. Using a structural approach, I show that bank lobbying is negatively … associated with the occurrence of a run-like equilibrium, as is deposit insurance. The estimated effect on bank risk and value is …
Persistent link: https://www.econbiz.de/10012852488
The bail-in tool as implemented in the European bank resolution framework suffers from severe shortcomings. To some …-runnable long-term debt, even if investors are able to gauge the relevant risk of PSI in a bank’s failure correctly at the time of …
Persistent link: https://www.econbiz.de/10011720767
This paper argues that first passage time models are likely to better than affine hazard rate models in modelling stressed credit markets and confirms their superior performance in explaining the behavior of Credit Default Swap rates for the major US banking groups over the period of the...
Persistent link: https://www.econbiz.de/10012954808