We investigate the consequences of banks' liquidity hoarding behaviour for the stability of the financial system by proposing a new model of banking contagion through two channels, bilateral exposures and funding shortage. Inspired by the key role of liquidity hoarding in the 2007-2009 financial...

Financial institutions may be vulnerable to predatory short selling. When the stock of a financial institution is shorted aggressively, leverage constraints imposed by short-term creditors can force the institution to liquidate long-term investments at fire sale prices. For financial...

Many large U.S. bank holding companies (BHCs) continued to pay dividends during the recent financial crisis, even as financial market conditions deteriorated, large losses accumulated, and emergency capital and liquidity were being provided by the official sector. In contrast, share repurchases...

The sovereign debt crisis, which hit Italy hard, affected first banks’ liquidity and secondly the cost and volumes of funding and loans. Italian banks are now facing the effects of the double-dip recession, which has significantly weakened businesses and households, their key customer...

How the principle of proportionality can be applied to the new bank’s Internal control system? Applying the Drsa methodology of classification to a significant Italian banks sample, the research proposes three different banks’ segments. Each segment is defined according to the size of the...

The financial sector incurred big losses during the recent financial collapse and recession. The losses occurred despite regulatory requirements imposed upon the financial services industry meant to ensure confidence and stability. This study analyzes the profitability and stock returns of...

The financial system is a private-public partnership coming from government ceding the right to produce means of payment with the related permission on leveraged lending services, against the acceptance of rules designed to ensure stability for both individual institutions and the financial...

Financial crises frequently increase public sector borrowing and threaten some form of sovereign debt crisis. Until recently, high income countries were thought to have become less vulnerable to severe banking crises that have lasting negative effects on growth. Since 2007, crises and attempted...

We employ a comprehensive data set and a variety of methods to provide evidence on the magnitude of large banks’ funding advantage in Canada, and on the extent to which market discipline exists across different securities issued by the Canadian banks. The banking sector in Canada provides a...

The Basel capital adequacy ratios lost credibility with financial markets during the crisis. This paper argues that failure was the result of the reliance of the Basel standards on overstated asset values in reported equity capital. The United States’ stress tests were able to assist in...