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We study how banks manage their liquidity among the various assets at their disposal. We exploit the introduction of the ECB’s two-tier system which heterogeneously reduced the cost of additional reserves holdings. We find that the treated banks increase reserve holdings by borrowing on the...
Persistent link: https://www.econbiz.de/10014239530
This paper analyzes the individual bidding behavior of German banks in the money market auctions conducted by the ECB from the beginning of the third quarter of 2000 to the end of the first quarter of 2001. Our approach takes a variety of characteristics of the individual banks into account. In...
Persistent link: https://www.econbiz.de/10014223075
estimated while controlling for the macroeconomic environment. An increase in bank' balance sheet risk is shown to increase the …
Persistent link: https://www.econbiz.de/10013097610
In this brief essay, to be included in a book celebrating the work of Jay Westbrook, I begin by surveying Jay's wide-ranging contributions to bankruptcy scholarship. Jay's functional analysis has had a profound effect on scholars' understanding of key issues in domestic bankruptcy law, and Jay...
Persistent link: https://www.econbiz.de/10012910928
future compensation for some portion of fines and fraud-based judgments (including settlements) against the bank. The …
Persistent link: https://www.econbiz.de/10012999388
to fail. Failure of a bank may trigger formal insolvency (resolution) proceedings, if there is no available option to … save it as a going concern. Bank insolvency proceedings comprise various mechanisms, instruments, and transactions to … enable resolution authorities to properly deal with a failed bank. Bank restructuring within insolvency proceedings means …
Persistent link: https://www.econbiz.de/10013052778
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We show that a liquidity shock can affect the solvency of a bank and cause its default if the bank does not hold enough … individual bank. These shock scenarios are materialized by different net demands for withdrawal of funds (NDWF) - which are not … necessarily justified by the solvency situation of the bank before the initial shock - and may lead the bank to sell illiquid …
Persistent link: https://www.econbiz.de/10014350497
holders rather than to taxpayers, the central bank should be given a limited LOLR role to shore up the resolved firm's funding …
Persistent link: https://www.econbiz.de/10012829689