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No-fault Default, Chapter 11 Bankruptcy, and Financial Institutions

Merton, Robert C.; Thakor, Richard T. - 2021

This paper analyzes the costs and benefits of a no-fault-default debt structure as an alternative to the typical bankruptcy process. We show that the deadweight costs of bankruptcy can be avoided or substantially reduced through no-fault-default debt, which permits a relatively seamless transfer...

Persistent link: https://www.econbiz.de/10013249095

Corporate Restructuring and Creditor Power : Evidence from European Insolvency Law Reforms

Closset, Frédéric; Großmann, Christoph; Kaserer, … - 2021

In an attempt to match US bankruptcy law, many European countries have reformed their insolvency laws towards a regime that fosters corporate restructuring. This paper evaluates the implications of these reforms. Based on a staggered difference-in-differences analysis around eight insolvency...

Persistent link: https://www.econbiz.de/10013244320

Debt Liquidity and Recession Economics During the Pandemic : A Blessing or a Curse?

Savvides, Savvakis C. - 2020

Normal demand will return to pre-pandemic levels only when conditions for living a normal life also gradually come back. And this will not happen before a vaccine is discovered, produced and administered or a cure is in place. The article questions the wisdom of prematurely using recession...

Persistent link: https://www.econbiz.de/10012829294

The Impact of Misvaluation on REITs’ Liquidity Management

Nguyen, Linh - 2020

Using three different approaches to measure misvaluation, we analyse the impact of misvaluation on liquidity management … the bank credit line component relative to the cash component in the total liquidity increases with the increase in … misvaluation. Taken together, our results suggest that misvaluation has a significant impact on liquidity management in the REIT …

Persistent link: https://www.econbiz.de/10012831941

Default Risk in Corporate Yield Spreads

Dionne, Georges - 2010

An important research question examined in the credit risk literature focuses on the proportion of corporate yield spreads attributed to default risk. This topic is reexamined in the light of the different issues associated with the computation of transition and default probabilities obtained...

Persistent link: https://www.econbiz.de/10012717692

Distressed firms, zombie firms and zombie lending : a taxonomy

Álvarez Román, Laura; Garcia-Posada, Miguel; … - 2021

This paper develops a taxonomy of financially distressed and zombie firms based on a rich dataset that combines detailed firm-level and bank-firm level information in Spain. A distressed firm exhibits both cash-flow and balance-sheet insolvency whereas a zombie firm is a distressed company that...

Persistent link: https://www.econbiz.de/10013314043

Confronting the zombies : policies for productivity revival

Andrews, Dan; McGowan, Muge Adalet; Millot, Valentine - 2017

Policies that spur more efficient corporate restructuring can revive productivity growth by targeting three inter-related sources of labour productivity weakness: the survival of “zombie” firms (low productivity firms that would typically exit in a competitive market), capital misallocation...

Persistent link: https://www.econbiz.de/10011779088

A dynamic theory of mutual fund runs and liquidity management

Zeng, Yao - 2017

I model an open-end mutual fund investing in illiquid assets and show that the fund's endogenous cash management can generate shareholder runs even with a flexible NAV. The fund optimally re-builds its cash buffers at time t + 1 after outflows at t to prevent future forced sales of illiquid...

Persistent link: https://www.econbiz.de/10011976823

Safe to Fail

Huertas, Thomas - In: Journal of Financial Perspectives 1 (2013) 3, pp. 93-109

liquidity to the bank-in-resolution. Creating such a pre-pack solution should form the core of the resolution plans that …

Persistent link: https://www.econbiz.de/10010991079

Identyfikacja i analiza porównawcza instytucji systemowo wa¿nych w Europie. (The analytical framework for identifying and benchmarking systemically important financial institutions...

Karkowska, Renata - In: Problemy Zarzadzania 12 (2014) 48, pp. 25-40

, i.e.: leverage, liquidity, capital ratio, asset quality and profitability, as a source of systemic risk. The aim of the … excessive debt, liquidity, capital adequacy and effectiveness for the largest commercial banks in Europe do not differ from the …

Persistent link: https://www.econbiz.de/10011265600