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The path between financial meltdown and moral hazard in banking is, at best, narrow and impervious. During the financial crisis, public support became the standard response to save the banks in difficulty, heightening and broadening the moral hazard issue: subordinated/senior debt holders and...
Persistent link: https://www.econbiz.de/10013120058
affects banks' profitability using panel data of a sample of 567 banks, mainly from Organisation for Economic Cooperation and … banks' profitability, whereas higher levels of the institutional environment or stricter banking regulation reduces banks …' profitability. The negative effect of the institutional environment and banking regulation was of lower magnitude during the global …
Persistent link: https://www.econbiz.de/10012839032
This paper considers the financial stability risks caused by Big Tech's entry into retail banking and discusses alternative policy responses aimed at allaying those concerns. The entry of Big Tech platforms may transform the retail banking industry in radical ways: while it may spur much-needed...
Persistent link: https://www.econbiz.de/10012836369
requirements, using financial data of the Swiss systemically important bank UBS. It can be shown that the leverage ratio …
Persistent link: https://www.econbiz.de/10010340012
This paper investigates a model of strategic interactions in financial networks, where the decision by one agent on whether or not to default impacts the incentives of other agents to escape default. Agents' payoffs are determined by the clearing mechanism introduced in the seminal contribution...
Persistent link: https://www.econbiz.de/10011790364
This paper studies the country-level reaction of bank credit default swap (“CDS”) spreads and stock prices to bailout … announcements in the US and five European countries in October 2008. Bailouts announcements are associated with bank CDS spreads … narrowing, both for domestic and foreign banks, pointing to an important role for cross-border exposures. Movements in bank …
Persistent link: https://www.econbiz.de/10012890725
We study the impact of higher bank capital buffers, namely of the Other Systemically Important Institu- tions (O …
Persistent link: https://www.econbiz.de/10012024808
crisis. These policies are often aimed at the commercial banking sector, while a host of other non-bank financial … institutions, or shadow banks, may not fall under their jurisdiction. We study the effects of tightening commercial bank regulation … tighter capital requirements on commercial banks increase shadow bank lending, which may have adverse financial stability …
Persistent link: https://www.econbiz.de/10012035452
In this paper we describe systemic financial risk as a pollution issue. Free riding leads to excess risk production. This problem may be solved, at least partially, either with financial regulation or taxation. From a normative viewpoint taxation is superior in many respects. However, reality...
Persistent link: https://www.econbiz.de/10013124679
significant even after controlling for bank specific variables. Moreover, larger banks have less intermediation ratio which …
Persistent link: https://www.econbiz.de/10011862276