In the wake of the financial market crisis new rules on banking recovery and resolution of systemic banks have been enacted in order to facilitate the bail-in of banks' creditors. Banks will be required to maintain sufficient amounts of own funds and bail-inable debt called Minimum Requirement...

This paper describes a model in which a network of interbank loans leads to a severe amplification of the previously unanticipated insolvency of one bank. Banks that cannot rule out an indirect hit react by selling assets and hoarding liquidity. While this potentially lowers illiquidity risks,...

Since 2007, the operating conditions of companies have changed significantly and can be described as more unpredictable. Insolvency of one company may, by the domino effect, have negative impacts on other operators. In extreme cases, these impacts can lead to their bankruptcy. Therefore, it is...

We construct a novel dataset to measure banks' complexity and relate it to banks' riskiness. The sample covers stock listed Euro area banks from 2007 to 2014. Bank stability is significantly affected by complexity, whereas the direction of the effect differs across complexity measures. This...

We employ a representative sample of 80,972 Italian firms to forecast the drop in profits and the equity shortfall triggered by the COVID-19 lockdown. A 3-month lockdown generates an aggregate yearly drop in profits of about 10% of GDP, and 17% of sample firms, which employ 8.8% of the sample's...

The aim of this article is to use multiple discriminant analysis (MDA) and logit models to assess the risk of bankruptcy of companies in the Polish tourism sector in the crisis conditions caused by the COVID-19 pandemic. A review of the literature is used to select models appropriate to analyze...

This paper focuses on the many extreme credit default swap spread movements observed during the recent credit crisis and on how the tails of the spread (and price) change distribution significantly differ from those of the normal distribution even for diversified credit derivatives portfolios....

In this study, we benchmarked the crisis resolution frameworks of the Member States of the West African Monetary Zone (WAMZ) with the Financial Stability Board's Key Attributes (KAs) of effective resolution regime for financial institutions, using survey-based methodology. Questionnaires,...

This study is intended to identify the predictors of financial distress for the Pakistani firms. Variables used are the financial ratios representing profitability, liquidity, leverage, and cash flows, as well as two important market factors which are size and idiosyncratic standard deviation of...

Why do some banks fail in financial crises while others survive? This paper answers this question by analysing the consequences of the Dutch financial crisis of the 1920s for 143 banks, of which 37 failed. Banks' choices in balance sheet composition, corporate governance practices and...