This paper analyzes the effect of the removal of government guarantees on bank risk taking. We exploit the removal of guarantees for German Landesbanken which results in lower credit ratings, higher funding costs, and a loss in franchise value. This removal was announced in 2001, but...

This paper analyzes the effect of the removal of government guarantees on bank risk taking. We exploit the removal of guarantees for German Landesbanken which results in lower credit ratings, higher funding costs, and a loss in franchise value. This removal was announced in 2001, but...

How does business complexity affect risk management in financial institutions? The commonly used risk measures rely on either balance-sheet or market-based information, both of which may suffer from identification problems when it comes to answering this question. Balance-sheet measures, such as...

Better customer service provisions by banks - such as more branches and ATMs, longer business hours, and more personalized services - help attract more core deposits and increase funding stickiness by raising depositors' switching costs and enhancing their loyalty. Funding stickiness from...

We investigate the effects of increased bond market transparency on the risk sensitivity of yield spreads for bank-issued subordinated notes and debentures after bond markets became more transparent in 2002. Models of yield spread levels and yield spread changes show improvement in normal...

This study analyzes the effects of managerial ownership on the risk-taking behavior of Korean and Japanese banks during the relatively regulated period of the late 1990s to the early 2000s. It finds that managerial ownership alone does not affect either the risk or the profit levels of Korean...

Changes in value of a plain vanilla bond are largely due to the fluctuations of default-free yields (hereinafter referred to as risk-free rates) and to the dynamics of the credit spread required for protection against the borrower's insolvency.In most common financial asset evaluation...

Among operational risk practitioners there is some confusion about the implications of the loss data collection threshold and the estimation of "truncated" or "shifted" distributions. Claims that "shifted" models result in biased parameter estimates rely on the premise that the "true" model is...