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Kakushadze, Zura - 2019

We discuss a simple, exactly solvable model of stochastic stock dynamics that incorporates regime switching between healthy and distressed regimes. Using this model, which is analytically tractable, we discuss a way of extracting expected returns for stocks from realized CDS spreads,...

Persistent link: https://www.econbiz.de/10012863946

Identifying empty creditors with a shock and micro-data

Degryse, Hans; Gündüz, Yalın; O'Flynn, Kuchulain; … - 2021

Firms with credit-default swaps (CDS) traded on their debt may face "empty creditors" as hedged creditors have less incentive to participate in firm restructuring. We test for the existence of empty creditors by employing an exogenous change to the bankruptcy code in Germany that effectively...

Persistent link: https://www.econbiz.de/10012697959

Identifying empty creditors with a shock and micro-data

Degryse, Hans; Gündüz, Yalın; O'Flynn, Kuchulain; … - 2020

Firms with credit-default swaps (CDS) traded on their debt may face "empty creditors'' as hedged creditors have less incentive to participate in firm restructuring. We test for the existence of empty creditors by employing an exogenous change to the bankruptcy code in Germany, that effectively...

Persistent link: https://www.econbiz.de/10012181510

Who is Screened Out of Social Insurance Programs by Entry Barriers? Evidence from Consumer Bankruptcies

Scholnick, Barry - 2015

Entry barriers into social insurance programs will be effective screening devices if they cause only those individuals receiving higher benefits from a program to participate in that program. We find evidence for this by using plausibly exogenous variations in travel-related entry costs into the...

Persistent link: https://www.econbiz.de/10013012282

Credit Card Reform and Bankruptcy Reform

Simkovic, Michael - 2012

Consumer advocates won a victory with the passage of the Credit Card Accountability Responsibility and Disclosure Act of 2009. (Credit Card Act). The Credit Card Act bans certain pricing practices that were confusing to credit card users. Ironically, the seeds of this legislative victory may...

Persistent link: https://www.econbiz.de/10013116346

Changes in Personal Bankruptcy Protection Laws : The Impact to Home Mortgage Lending

Damm, Jason - 2019

In the U.S., individuals who file for bankruptcy can protect a certain amount of property from creditor liquidation during the debt settlement process. Our analysis exploits changes in these laws to determine the impact on home mortgage lending. We find that the additional debtor protection...

Persistent link: https://www.econbiz.de/10012895091

Changes in Personal Bankruptcy Protection Laws : The Impact on Bank Lending to Small Businesses

Damm, Jason - 2019

In the U.S., individual parties who file for bankruptcy can exempt a certain dollar amount of property from creditor liquidation during the debt settlement process. We examine the effect of changes to these protection laws on bank lending to small businesses. Our results indicate that additional...

Persistent link: https://www.econbiz.de/10012898163

Debt and Insolvency

Heaton, J.B. - 2020

about the design of debt contracts. The results derive from the premise that firms must avoid legal insolvency when issuing … new debt because insolvency at issuance would trigger severe operational limitations on the issuer. I first show that … legal insolvency limits debt capacity, limiting the amount of money that a firm can raise with debt. I next show that legal …

Persistent link: https://www.econbiz.de/10012852105

The impact of consumer credit access on self-employment and entrepreneurship

Herkenhoff, Kyle; Phillips, Gordon M.; Cohen-Cole, Ethan - 2018

We examine how consumer credit access impacts self-employment and small business ownership by building a new dataset that links 3 million individual earnings and credit reports to pass-through tax records. We show that self-employment and employer business ownership increase with personal credit...

Persistent link: https://www.econbiz.de/10012104568

Economics of Bankruptcy Exemption : Signaling Value of Collateral, Cost of Credit and Access to Credit

Arca, Pasqualina - 2019

We analyze the effect of a bankruptcy law according to which some of the borrower's assets are exempt from liquidation in the event of default in the context of a competitive credit market characterized either by moral hazard (MH) or by adverse selection (AS). In particular, we study how the...

Persistent link: https://www.econbiz.de/10012862259