Economic theory predicts that reciprocal brokered deposits, by facilitating an extension of deposit insurance coverage, may exacerbate moral hazard and reduce market discipline for banks, permitting them to take more risk in various dimensions. Using a newly available dataset, this note explores...

This paper tests the random walk hypothesis and weak form market efficiency in the VIX futures market using a variety of tests. A unit root in the aggregated market price series suggests that the VIX futures market is efficient. For the individual VIX futures price series, 51 of 54 futures...

Expanded public availability of U.S. banking data has prompted a need to reexamine end-of-quarter window dressing. We find substantial heterogeneity in the pattern of window dressing across banks and products, not all of which can be explained as customerinitiated, and some of which is...

Motivated by the observation that very few banks fail in normal years, we explore the impact of that pattern on the precision of a standard statistical failure model and discuss implications for regulation and risk management. Out-of-sample forecasting is found to be worse for a model fitted to...

This paper shows how a monopolist can be induced to produce at the optimal output level and price, by utilizing a strategic middleman to represent to the monopolist a synthetic demand curve such that perceived marginal revenue equals true (inverse) demand. Conditions are derived for insuring the...

We apply the Bresnahan--Lau model (1982) to test the degree of competition of China's banking industry over the period 1986 to 2011. Results strongly reject monopoly power and indicate perfectly competitive behaviour. China's entry into the WTO did not cause any measurable shift in banking...

Prior studies have shown that newly public firms exhibit a high degree of uncertainty and asymmetric information, with few reliable sources of information. These findings suggest that investors could benefit if some independent party is able to assess the quality of a newly public firm. Since...

Several theories of externalities and asymmetric information suggest a positive role for government programs to assist credit markets, though potential distortions by special interests carry attendant dangers. The authors examine the empirical association between funding by several federal...

Policymakers in Latin America increasingly are turning to policies that have high economic rates of return and a favorable impact on income distribution. By providing financial services to small businesses and poor households -which normally lack such services- credit unions help secure growth...