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Within and between systemic country risk. Theory and evidence from the sovereign crisis in Europe

Baglioni, Angelo; Cherubini, Umberto - In: Journal of Economic Dynamics and Control 37 (2013) 8, pp. 1581-1597

We propose a hierarchical Marshall–Olkin model of countrywide systemic risk. At the lower level, we model the systemic … risk of a crisis within the banking system (that we call “within” systemic risk) and at the higher level we model the … probability of a joint default of the banking system and the public sector (that we call “between” systemic risk). We apply the …

Persistent link: https://www.econbiz.de/10011051970

Drive 'Til You Qualify: Credit quality and household location

Hanson, Andrew; Schnier, Kurt; Turnbull, Geoffrey K. - In: Regional Science and Urban Economics 42 (2012) 1-2, pp. 63-77

A deeper understanding of the credit-sorting process is essential when considering the extent to which home foreclosures are driven by price contagion or an underlying spatial pattern of mortgage quality. Adapting household location theory, we find that credit constrained households follow...

Persistent link: https://www.econbiz.de/10011052384

Conflicts of interest on corporate boards: The effect of creditor-directors on acquisitions

Hilscher, Jens; Şişli-Ciamarra, Elif - In: Journal of Corporate Finance 19 (2013) C, pp. 140-158

This paper investigates the effects on acquisitions of creditor-director presence on corporate boards. Using a hand-collected dataset for boards of large U.S. corporations, we find that companies with creditor-directors are more likely to engage in acquisitions with attributes that are...

Persistent link: https://www.econbiz.de/10011052882

Financial crisis and bank executive incentive compensation

Bhagat, Sanjai; Bolton, Brian - In: Journal of Corporate Finance 25 (2014) C, pp. 313-341

incur due to the dramatic share price declines in 2008. We consider three measures of risk-taking by these banks. Our … incentives matter — incentives generated by executive compensation programs are correlated with excessive risk-taking by banks … of banks during the crisis was the result of unforeseen risk. We recommend that bank executive incentive compensation …

Persistent link: https://www.econbiz.de/10011052909

The politician and his banker — How to efficiently grant state aid

Hainz, Christa; Hakenes, Hendrik - In: Journal of Public Economics 96 (2012) 1, pp. 218-225

Politicians should spend money as efficiently as possible. But what is the best method of granting state aid to firms? We use a theoretical model with firms that differ in their success probabilities and compare different types of direct subsidies with indirect subsidies through bank loans. We...

Persistent link: https://www.econbiz.de/10011056100

The relationship between revenue diversification and bank performance: Do financial structures and financial reforms matter?

Lee, Chien-Chiang; Hsieh, Meng-Fen; Yang, Shih-Jui - In: Japan and the World Economy 29 (2014) C, pp. 18-35

This paper contributes to the existing literature by investigating the impact of revenue diversification on bank performance through a broad array of financial reforms, including credit controls, interest rate controls, entry barriers, banking supervision, privatization, and financial account...

Persistent link: https://www.econbiz.de/10011056229

Credit crunch and its spatial differences in Japan's lost decade: What can we learn from it?

Ishikawa, Daisuke; Tsutsui, Yoshiro - In: Japan and the World Economy 28 (2013) C, pp. 41-52

In this paper, we aim to elucidate whether effects related to supply or demand contributed to the Japanese “credit crunch” in the 1990s. Using prefectural panel data, we estimate loan supply and demand functions and calculate their shifts. Our analysis reveals that demand-side effects...

Persistent link: https://www.econbiz.de/10011056240

Financial integration, specialization, and systemic risk

Fecht, Falko; Grüner, Hans Peter; Hartmann, Philipp - In: Journal of International Economics 88 (2012) 1, pp. 150-161

necessarily increase risk, because a well-functioning interbank market allows to achieve the necessary diversification. This … greater need for risk sharing, though, increases the risk of cross-border contagion and the likelihood of widespread banking … crises. However, even though integration increases the risk of contagion it improves welfare if it permits banks to realize …

Persistent link: https://www.econbiz.de/10011056324

“Lending by example”: Direct and indirect effects of foreign banks in emerging markets

Giannetti, Mariassunta; Ongena, Steven - In: Journal of International Economics 86 (2012) 1, pp. 167-180

Using a novel dataset that allows us to trace the bank relationships of a sample of mostly unlisted firms, we explore which borrowers are able to benefit from foreign bank presence in emerging markets. Our results suggest that the limits to financial integration are less tight than the static...

Persistent link: https://www.econbiz.de/10011056364

Systematic cyclicality of systemic bubbles: Evidence from the U.S. commercial banking system

Kim, Myeong Hyeon; Kim, Baeho - In: Journal of Macroeconomics 42 (2014) C, pp. 281-297

-cyclical interaction between the market-wide risk perception and system-wide asset management behavior. Based on a Markov regime …

Persistent link: https://www.econbiz.de/10011117990