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Incentivizing Resilience in Financial Networks

Leduc, Matthew V. - 2017

When banks extend loans to each other, they generate a negative externality in the form of systemic risk. They create a … network of interbank exposures by which they expose other banks to potential insolvency cascades. In this paper, we show how a …

Persistent link: https://www.econbiz.de/10012969057

Liquidity, Systemic Risk, and the Bankruptcy Treatment of Financial Contracts

Mokal, Riz - 2016

Persistent link: https://www.econbiz.de/10013002918

Toward a Run-Free Financial System

Cochrane, John H. - 2016

.I suggest that Pigouvian taxes provide a better structure to control debt issue than capital ratios; that banks should be 100 …

Persistent link: https://www.econbiz.de/10013006535

Systemic Risk Management in Financial Networks with Credit Default Swaps

Leduc, Matthew V. - 2020

We study insolvency cascades in an interbank system when banks are allowed to insure their loans with credit default … swaps (CDS) sold by other banks. We show that, by properly shifting financial exposures from one institution to another, a …

Persistent link: https://www.econbiz.de/10012855794

Beyond the Search for Certainty : Addressing the Cross-Border Resolution Gap

Mevorach, Irit - 2016

This Article compares the development of cross-border solutions for resolving and reorganizing commercial entities to those solutions available for financial institutions. This Article argues that the resolution regime for financial institutions needs to move forward from the existing...

Persistent link: https://www.econbiz.de/10012984262

Over-Indebtedness, Predatory Lending, and the International Political Economy of Residential Home Mortgage Securitization : Comparing the United States' Subprime Home Mortgage Lend...

Peterson, Christopher Lewis - 2013

Following the United States, many countries around the world have increasingly turned to structured finance, also known as securitization, to fund loan portfolios. This trend has taken on troubling undertones in the wake of widespread default in the American sub-prime residential mortgage backed...

Persistent link: https://www.econbiz.de/10012711261

Do Lenders Still Monitor? Leveraged Lending and the Search for Covenants

Tung, Frederick - 2021

leveraged loans too risky for banks to keep. Syndicated lending now involves greater and greater participation by nonbank or …

Persistent link: https://www.econbiz.de/10013217331

The Pitfalls of Pledgeable Cash Flows : Soft Budget Constraints, Zombie Lending and Under-Investment

Bernhardt, Dan; Koufopoulos, Kostas; Trigilia, Giulio - 2021

We show that when borrowers are privately informed about their creditworthiness and lenders have a soft budget constraint, efficient investment requires a limit on the fraction of a firm’s cash flows that can be pledged to outsiders. That is, pledgeability should neither be too low nor too...

Persistent link: https://www.econbiz.de/10013240884

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

Ownership structure and bank risk-taking in ASEAN countries : a quantile regression approach

Quang Khai Nguyen - In: Cogent economics & finance 8 (2020) 1, pp. 1-19

This study examines the effect of ownership structure on the risk-taking behavior of banks in ASEAN countries. Using a … sample of 96 commercial banks in ASEAN countries from 2002 to 2018, the study demonstrates that the relationship between … ownership structure and bank risk-taking behavior is correlated with the characteristics of individual banks in terms of …

Persistent link: https://www.econbiz.de/10013179549