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Public funding of banks and firms in a time of crisis

Haavio, Markus; Ripatti, Antti; Takalo, Tuomas - 2022

We study public funding of banks and non-financial firms in a time of crisis. We find that bank capitalization is more effective in stabilizing the economy than direct funding to firms, but it also creates larger distortions. We show that the optimal, social-welfare-maximizing, structure of a...

Persistent link: https://www.econbiz.de/10013262563

Policy uncertainty, lender of last resort and the real economy

Jasova, Martina; Mendicino, Caterina; Supera, Dominik - 2021

We show that a reduction in lender of last resort (LOLR) policy uncertainty posi-tively affects bank lending and propagates to investment and employment. We exploita unique policy that reduced uncertainty regarding the availability of future LOLRfunding for banks as a quasi-natural experiment....

Persistent link: https://www.econbiz.de/10012426306

Firm subsidies, financial intermediation, and bank stability

Kazakov, Aleksandr; Koetter, Michael; Titze, Mirko; … - 2022

We use granular project-level information for the largest regional economic development program in German history to study whether government subsidies to firms affect the quantity and quality of bank lending. We combine the universe of recipient firms under the Improvement of Regional Economic...

Persistent link: https://www.econbiz.de/10013412630

Central bank collateral frameworks

Nyborg, Kjell G. - 2015

in modern monetary and financial systems, namely central bank collateral frameworks. Their importance can be understood …, not defined in a market, but by the collateral frameworks and interest rate policies of central banks. Using the … collateral framework of the Eurosystem as a basis of illustration and case study, the paper brings to light the functioning …

Persistent link: https://www.econbiz.de/10011296085

Optimal unconventional monetary policy in the face of shadow banking

Kirchner, Philipp; Schwanebeck, Benjamin - 2017

Using a DSGE framework, we discuss the optimal design of monetary policy for an economy where both retail banks and shadow banks serve as financial intermediaries. We get the following results. During crises times, a standard Taylor rule fails to reach sufficient stimulus. Direct asset purchases...

Persistent link: https://www.econbiz.de/10011671242

Implications of bank regulation for loan supply and bank stability : a dynamic perspective

Bucher, Monika; Dietrich, Diemo; Hauck, Achim - 2018

A bank's decision on loan supply and capital structure determines its immediate bankruptcy risk as well as the future availability of internal funds. These internal funds in turn determine a bank's future costs of external finance and future vulnerability to bankruptcy risks. We study these...

Persistent link: https://www.econbiz.de/10011918996

On shadow banking and financial frictions in DSGE modeling

Kirchner, Philipp - 2020

At the forefront of macroeconomic research on the causes of the Great Financial Cri- sis (GFC) was and still is the usage of dynamic stochastic general equilibrium (DSGE) models. To capture the nonlinearities of the GFC, these models were enriched with a variety of financial frictions. This...

Persistent link: https://www.econbiz.de/10012198325

'Loans for the Little Fellow : ' Credit, Crisis, and Recovery in the Great Depression

Quincy, Sarah - 2019

This paper studies how structural transformation exacerbates financial crises. Using newly collected data, I document the persistent effect of credit supply shocks on local economies during the Great Depression. Cities with access to an unusually generous branching network were no different from...

Persistent link: https://www.econbiz.de/10012857844

Loans for the "Little Fellow : " Credit, Crisis, and Recovery in the Great Depression

Quincy, Sarah - National Bureau of Economic Research - 2023

This paper identifies how bank branching benefited local economies during the Great Depression. Using archival data and narrative evidence, I show how Bank of America's branch network in 1930s California created an internal capital market to diversify away local liquidity shortfalls, allowing it...

Persistent link: https://www.econbiz.de/10014421204

The macroeconomics of liquidity in financial intermediation

Porcellacchia, Davide; Sheedy, Kevin D. - 2024

explains the link between the liquidity premium and spreads. We present a theory of endogenous bank fragility arising from a … coordination friction among bank creditors. The theory's implications reduce to a single constraint on banks, which is embedded in …

Persistent link: https://www.econbiz.de/10014528265