The paper constructs a search-theoretic model of credit markets with a bilateral trading mechanism that enables the manageable introduction of asymmetric information. Borrowers´ success probabilities are unobservable to financiers, but the degree of risk in observable projects can be used as a...

To resolve the IPO underpricing puzzle it is essential to analyze who knows what when during the issuing process. In Germany, broker-dealers make a market in IPOs during the subscription period. We examine these pre-issue prices and find that they are highly informative. They are closer to the...

This paper studies how comparing can be used to provide information in financial markets in the presence of a hidden characteristics problem.Although an investor cannot precisely estimate the future returns of an entrepreneur's projects, the investor can mitigate the asymmetric information...

When companies go public to gather financial resources, the stocks they sell in an initial public offering (IPO) tends to be underpriced, resulting in a substantial price jump on the first day of trading. Underpricing of IPO has attracted important researching efforts in the last time. The...

This paper studies how comparing can be used to provide information in financial markets in the presence of a hidden characteristics problem. Although an investor cannot precisely estimate the future returns of an entrepreneur’s projects, the investor can mitigate the asymmetric information...

This paper analyses the effect of bank relationships on the interest rate and personaland real guarantees borne by a sample of small and medium-sized enterprises in theirindebtedness. The results of this paper indicate that the SMEs that work with fewer financialintermediaries obtain debt at a...

Repo markets trade off the efficient allocation of liquidity in the financial sector with resilience to funding shocks. The repo trading and clearing mechanisms are crucial determinants of the allocation-resilience tradeoff. The two common mechanisms, anonymous central-counterparty (CCP) and...

Market design matters when heterogeneous borrowers roll over loans, facing funding shocks. Borrower anonymity is a key feature of various financial markets, such as short term, interbank lending markets. We show that anonymous markets experience systemic runs for large shocks, but provide...

In recent years the market for asset backed securities (ABS) has shown a rapid growth. In an ABS transaction assets are first pooled and then securities backed by this pool are issued. In many cases, several tranches of securities differing with respect to their priority of payment are designed....

In den vergangenen Jahren verzeichnete der Markt für Asset Backed Securities (ABS) ein rasantes Wachstum. Im Rahmen einer ABS-Transaktion werden Forderungen in einem Pool gebündelt und Wertpapiere emittiert, die mit diesem Forderungspool unterlegt sind. Häufig werden mehrere...