This paper was presented at the conference "Financial services at the crossroads: capital regulation in the twenty-first century" as part of session 2, "Credit risk modeling." The conference, held at the Federal Reserve Bank of New York on February 26-27, 1998, was designed to encourage a...

This Financial System Stability Assessment paper for Ukraine reviews financial sector issues and highlights macroeconomic developments, vulnerabilities, and soundness of the financial system. It discusses creditors' rights, insolvency, and corporate governance, and Anti-Money Laundering and...

Financial crises are endogenized through corporate and interbank market institutions. Single-bank financing leads to a pooling equilibrium in the interbank market. With private information about one’s own solvency, the best illiquid banks will not borrow but rather will liquidate some...

The authors derive optimal financial claim for a bank when the borrowing firm's uninformed stakeholders depend on the bank to establish whether the firm is distressed and whether concessions by stakeholders are necessary. The bank's financial claim is designed to ensure that it cannot collude...

This paper explores the optimal financial contract for a large investor with potential control over a firm's investment decisions. The authors show that an optimally designed menu of claims for a large investor will include features resembling a U.S. version of lender liability doctrine,...

This 2009 Article IV Consultation highlights that Sweden has been hit hard by the global financial crisis. Two of its banks built up large exposures in the Baltics that significantly increased loan losses beyond normal recessionary levels. In response to the crisis, the authorities have taken...

Government securities holdings at U.S. commercial banks have risen rapidly since 1990. The author contrasts the recent rise with increases observed during and after earlier recessions and evaluates possible explanations for the buildup. In addition, he presents a rough estimate of the interest...