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Flight-to-liquidity and the great recession
Radde, Sören - 2012
outflows with loan scale. The model shows that an aggregate shock to the collateral value of bank assets triggers a flight to … liquidity, which amplifies the initial shock and induces credit crunch dynamics sharing key features with the Great Recession …. The paper thus develops a new balance sheet channel of shock transmission that works through the composition of banks …
Persistent link: https://www.econbiz.de/10009664944
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Flight-to-liquidity and the great recession
Radde, Sören - 2012
outflows with loan scale. The model shows that an aggregate shock to the collateral value of bank assets triggers a flight to … liquidity, which amplifies the initial shock and induces credit crunch dynamics sharing key features with the Great Recession …. The paper thus develops a new balance sheet channel of shock transmission that works through the composition of banks …
Persistent link: https://www.econbiz.de/10009665427
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Capital deaccumulation and the large persistent effects of financial crises
Knowles, Matthew - 2023
show that these patterns can arise in a model where a financial shock temporarily increases the costs of external finance … substantially when investment falls after a financial shock. I find that this mechanism can account for almost a third of the …
Persistent link: https://www.econbiz.de/10014233623
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Liquidity Shocks, Local Banks, and Economic Activity : Evidence from the 2007-2009 Crisis
Goetz, Martin Richard - 2018
This paper studies the relationship between shocks to local banks and economic activity, by exploiting differences in the liability structure of small U.S. commercial banks during the 2007-09 crisis. Banks that relied more heavily on wholesale liabilities reduced lending relatively more during...
Persistent link: https://www.econbiz.de/10012940563
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Reassessing the thesis of the monetary history
Laidler, David E. W. - 2013
The economic crisis that began in 2007 and still lingers has invited comparison with the Great Depression of the 1930s. It has also generated renewed interest in Milton Friedman and Anna Schwartz's explanation of the latter as mainly the consequence of the Fed's failure as a lender of last...
Persistent link: https://www.econbiz.de/10010191681
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Exposure to international crises : trade vs. financial contagion
Grant, Everett - 2016
I identify new patterns in countries' economic performance over the 2007-2014 period based on proximity through distance, trade, and finance to the US subprime mortgage and Eurozone debt crisis areas. To understand the causes of the cross-country variation, I develop an open economy model with...
Persistent link: https://www.econbiz.de/10011975657
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Follow the Money : Quantifying Domestic Effects of Foreign Bank Shocks in the Great Recession
Cetorelli, Nicola - 2012
for larger branches. This internal shock to the balance sheets of U.S. branches of foreign banks had sizable effects on …
Persistent link: https://www.econbiz.de/10013110969
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The impacts of credit standards on aggregate fluctuations in a small open economy : the role of monetary policy
Le, Hai - In: Economies : open access journal 9 (2021) 4, pp. 1-26
Empirical evidence demonstrates that credit standards, including lending margins and collateral requirements, move in a countercyclical direction. In this study, we construct a small open economy model with financial frictions to generate the countercyclical movement in credit standards. Our...
Persistent link: https://www.econbiz.de/10012800343
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Credit crunches from occasionally binding bank borrowing constraints
Holden, Tom D.; Levine, Paul; Swarbrick, Jonathan M. - 2017
We present a model in which banks and other financial intermediaries face both occasionally binding borrowing constraints and costs of equity issuance. Near the steady state, these intermediaries can raise equity finance at no cost through retained earnings. However, even moderately large shocks...
Persistent link: https://www.econbiz.de/10011777841
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Cross-border liquidity, relationships and monetary policy : evidence from the Euro area interbank crisis
Abbassi, Puriya; Bräuning, Falk; Fecht, Falko; … - 2014 - This version: November 2014
We analyze the impact of financial crises and monetary policy on the supply of wholesale funding liquidity, and also on the compositional supply effects through cross-border and relationship lending. For empirical identification, we draw on the proprietary bank-to-bank European interbank dataset...
Persistent link: https://www.econbiz.de/10010471858