Download or read book Essays on Financial Intermediation and International Finance written by Paula Andrea Beltran Saavedra and published by . This book was released on 2022 with total page 205 pages. Available in PDF, EPUB and Kindle. Book excerpt: This dissertation consists of three chapters on financial intermediation and international finance that contribute to our understanding and identification of the transmission of aggregate shocks in imperfect financial markets. The first chapter studies the effect of an aggregate funding supply shock in a lending network in times of distress in a quantitative framework for the money market funds industry in the U.S. The second chapter identifies the effect of cross-border banking flows on macroeconomic and financial outcomes for emerging economies. The third chapter studies the identification of the impact of foreign exchange interventions under a limited risk-bearing capacity of financial intermediaries. The first chapter studies the implications of network frictions for the allocative efficiency of funding provision of the U.S. Money Markets Funds Industry. I build a tractable model of financial intermediation that features an incomplete network of counterparties and bilateral bargaining within a network. I use the quantitative model to assess the effect of a large supply shock of funding in the money market funds industry. I provide an identification framework to estimate the model's parameters and discipline the model using portfolio data of the money market funds industry. I assess a counterfactual taking as primitives the drop in assets under management at the onset of the COVID-19 pandemic and show that the model can account for price dispersion and funding allocation observed in the data. The second chapter assesses the effect of capital flows in emerging countries. We focus on the impact of cross-border banking flows and leverage the size distribution at the bilateral level to construct an instrument for capital inflows. We build a granular instrumental variable to identify the effects on macroeconomic and financial conditions for 22 emerging countries. Cross-border bank credit causes higher domestic activity in EMEs and looser financial conditions. We also show that the effect is heterogeneous across different levels of capital inflow controls. The third chapter studies the effects of foreign exchange intervention. We estimate the causal effect of foreign exchange intervention. Theoretically, the impact of foreign exchange intervention depends on the imperfect asset substitution that relates to the limited risk-bearing capacity of financial intermediaries. To identify the risk-bearing capacity, we use the variation from information free flows of passive investors around rebalancing dates. These flows are plausibly exogenous with respect to domestic conditions and act as a shock to the risk held by financial intermediaries. We show that information-free flows have effects on UIP and CIP deviations. Our preliminary estimates show that the required foreign exchange intervention to achieve a 10% foreign exchange depreciation in one week is between $0.02-$5.06 billion dollars.

Download or read book International Financial Intermediation written by Edmar Lisboa Bacha and published by . This book was released on 1982 with total page 52 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Essays in International Finance and Macroeconomics written by Matteo Maggiori and published by . This book was released on 2012 with total page 234 pages. Available in PDF, EPUB and Kindle. Book excerpt: This dissertation explores the relationship between international financial markets, financial frictions, and the real economy. In particular, the dissertation focuses on the role of the United States of America (US) as the key country in the global financial architecture. The research presented here advances the study of international finance and macroeconomics by analyzing how the combination of two factors, the greater financial development of the US and financing frictions, leads to the special global roles of the US funding markets and the US dollar. In the first Chapter of the dissertation, I develop a model of financial intermediation in a closed economy, which is also the key building block of the open economy analysis in the second Chapter. In an economy with savers and financial intermediaries where financing frictions are present, the state of the financial sector becomes the key state variable. The financing frictions, modeled as the limited enforceability of deposit contracts, prevent capital from flowing freely from savers to the financial intermediaries that ultimately allocate capital to productive real assets. When financial intermediaries are well capitalized, their capital acts as a safety buffer for potential investment losses and, consequently, financing frictions are alleviated. In this state of the world, financial markets closely resemble those of the standard frictionless asset pricing framework. When, on the other hand, intermediaries are poorly capitalized, concerns for potential losses of capital disrupt the financing markets. In this state of the world, capital does not flow smoothly from savers into productive assets via financial intermediaries. In general, risky assets' prices fall and their volatility increases, thus replicating typical features of financial crises. Interestingly, these effects are highly non-linear. In the second Chapter, I provide a framework for understanding the global financial architecture as an equilibrium outcome of the risk sharing between countries with different levels of financial development. The country that has the most developed financial sector takes on a larger proportion of global fundamental and financial risk because its financial intermediaries are better able to deal with funding problems following negative shocks. This asymmetric risk sharing has real consequences. In good times, and in the long run, the more financially developed country consumes more, relative to other countries, and runs a trade deficit financed by the higher financial income that it earns as compensation for taking greater risk. During global crises, it suffers heavier capital losses than other countries, exacerbating its fall in consumption. This country's currency emerges as the world's reserve currency because it appreciates during crises and so provides a good hedge. The model is able to rationalize these facts, which characterize the role of the US as the key country in the global financial architecture. In the third Chapter, I provide empirical evidence on the role of the US dollar as a global safe asset. This empirical evidence provides one of the stylized facts analyzed in my theoretical work. I show that the US dollar earns a safety premium versus a basket of foreign currencies and that this premium is particularly high in times of global financial stress. These findings support the view that the dollar acts as the reserve currency for the international monetary system and that it is a natural safe haven in times of crisis, when a global flight to quality toward the reserve currency takes place. During such episodes, investors are willing to earn negative expected returns as compensation for holding safe dollars. I estimate the time varying dollar safety premium by using instrumental variable techniques to condition information down.

Download or read book Finance Intermediaries and Economic Development written by Stanley L. Engerman and published by Cambridge University Press. This book was released on 2003-07-14 with total page 362 pages. Available in PDF, EPUB and Kindle. Book excerpt: This volume includes ten essays dealing with financial and other forms of economic intermediation in Europe, Canada, and the United States since the seventeenth century. Each relates the development of institutions to economic change and describes their evolution over time, as well as discussing several different forms of intermediation, and deals with significant economic and historical issues.

Download or read book International Money written by Charles P. Kindlerberger and published by Routledge. This book was released on 2013-11-05 with total page 360 pages. Available in PDF, EPUB and Kindle. Book excerpt: This book was first published in 1981. A collection of twenty-two papers, written between 1966 and 1976 on international monetary relations.

Download or read book The Theory of Financial Intermediation written by Bert Scholtens and published by . This book was released on 2003 with total page 59 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Finance Intermediaries and Economic Development written by Stanley L. Engerman and published by Cambridge University Press. This book was released on 2003-07-14 with total page 360 pages. Available in PDF, EPUB and Kindle. Book excerpt: This volume includes ten essays concerned with financial and other forms of economic intermediation in Europe, Canada, and the United States, dating from the seventeenth century through the twentieth. The essays relate the development of institutions to economic change and describe their evolution over time. Each also discusses several different forms of intermediation and deals with significant economic and historical issues.

Download or read book International Financial Intermediation Deficits Benign and Malignant written by George Nikolaus Halm and published by Princeton, N.J. : International Finance Section, Department of Economics, Princeton University. This book was released on 1968 with total page 36 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Contemporary Financial Intermediation written by Stuart I. Greenbaum and published by Academic Press. This book was released on 2019-05-14 with total page 490 pages. Available in PDF, EPUB and Kindle. Book excerpt: Contemporary Financial Intermediation, 4th Edition by Greenbaum, Thakor, and Boot continues to offer a distinctive approach to the study of financial markets and institutions by presenting an integrated portrait that puts information and economic reasoning at the core. Instead of primarily naming and describing markets, regulations, and institutions as is common, Contemporary Financial Intermediation explores the subtlety, plasticity and fragility of financial institutions and credit markets. In this new edition every chapter has been updated and pedagogical supplements have been enhanced. For the financial sector, the best preprofessional training explains the reasons why markets, institutions, and regulators evolve they do, why we suffer recurring financial crises occur and how we typically react to them. Our textbook demands more in terms of quantitative skills and analysis, but its ability to teach about the forces shaping the financial world is unmatched. Updates and expands a legacy title in a valuable field Holds a prominent position in a growing portfolio of finance textbooks Teaches tactics on how to recognize and forecast fluctuations in financial markets

Download or read book Essays in International Finance and Banking written by Anh Quoc Pham and published by . This book was released on 2019 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: I then show that intermediary capital provides one economic source of risk embedded within the more dominant carry factor and serves as an orthogonal source of risk to the global risk embedded within the dollar factor. This paper thus serves as motivation for the further development of open economy models with financial intermediaries and a deeper understanding of the underlying economic sources of risks that underlie the factor structure of exchange rates. Chapter 2 studies the impact of US monetary policy shocks on international bank lending at the aggregate level. I ask whether country-banking systems that are more exposed to dollar funding decrease their cross-border lending by more than less exposed countries following contractionary US monetary policy announcements. For a given country borrower, I show that this is indeed the case as a 25 basis point increase in the previous quarter decreases cross-border lending supply growth by 4% more from a country-banking system that is 10% more reliant on dollar funding.

Download or read book International Financial Intermediation written by Edmar Lisboa Bacha and published by . This book was released on 1982 with total page 8 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Capital Markets and Financial Intermediation written by Colin Mayer and published by Cambridge University Press. This book was released on 1995-09-29 with total page 384 pages. Available in PDF, EPUB and Kindle. Book excerpt: Financial intermediation is currently a subject of active research on both sides of the Atlantic. The integration of European financial markets, in particular, highlights several important issues. In this volume, derived from a joint CEPR conference with the Fundacion Banco Bilbao Vizcaya (BBV), leading academics from Europe and North America review 'state-of-the-art' theories of banking and financial intermediation and discuss their policy implications. The principal focus is on the risks of increased competition, the appropriate regulation of banks, and the differences between Anglo-American and Continental European forms of financial markets. Relationship banking, stock markets and banks, banking and corporate control, financial intermediation in Eastern Europe, monetary policy and the banking system, and financial intermediation and growth are also discussed.

Download or read book Essays on Financial Intermediation and Monetary Policy written by Abolfazl Setayesh Valipour and published by . This book was released on 2022 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: My research revolves around financial institutions. In this essay, I aim to further our understandings of the internal workings of financial intermediaries, how they interact in financial networks, and how they affect monetary policy and the macroeconomy. In the first chapter, James Peck and I study a bank run model where the depositors can choose how much to deposit. In the many years and many published articles following the bank runs paper of Diamond and Dybvig (1983), only a few papers have modeled the decision of whether to deposit, much less the decision of how much to deposit. The questions we address here are, how does the opportunity for consumers to invest outside the banking system- in investments that do not provide liquidity insurance- (1) affect the nature of the final allocation, (2) affect the nature of the optimal deposit contract, and (3) affect the fragility of the banking system? We extend the Diamond and Dybvig (1983) model so to incorporate sequential service constraint and the opportunity of outside investments and show that under certain conditions the equilibrium entails partial deposits, thus arguing for the optimality of limited banking. One might think that when depositors are allowed to invest a fraction of their endowments outside the banking system, they would be hedging against the risk of a run occurring, but losing out on some of the services provided by banks. Thus, one might think that this would improve the stability of the financial system at the expense of lost efficiency. However, we show that the opposite could be true, with reduced stability (runs more likely) but higher efficiency! In the second chapter, I study the strategic behavior of heterogeneous banks in a network and its implications on the stability of the financial system. I construct a model alas Allen and Gale (2000) wherein banks differ in whether they are hit by an uninsurable excess liquidity demand. I show that in such a framework banks that are already facing a high liquidity demand are more likely to incur the burden of excess liquidity shocks even when that shock has not directly hit them, i.e. relatively healthier banks strategically pass liquidation costs to relatively less healthy banks. I also show that private bailouts arise endogenously in this framework. If the strategic behavior of a bank results in the other bank's failure, the first bank may choose to incur the burden of the liquidity shock by itself to let the other bank survive and, thus, to control the indirect costs of failure feeding back to its portfolio. I also show that for some economies the financial network becomes more stable as the level of cross-deposits is increased from the minimum level that fully insures banks against liquidity demand uncertainty up to a threshold level. In the third chapter, I study the role of financial intermediaries in the transmission of monetary policy in low interest rate environments. The global financial crisis not only proved our understanding of intermediaries were inaccurate and in many ways misleading but also provided an unprecedented opportunity to investigate the questions in ways that were not possible before. Among those, was the behavior of economic players in ultra-low and even negative market rates. I study the internal workings of intermediaries by exploiting geographical variation in market concentration and provide the first explanation for the gradual deterioration of monetary policy power in low market rates that does not rely on bank-specific characteristics and similarly applies to non-bank intermediaries. I show that- in stark contrast to the textbook view but consistent with my mechanism- in low market rates more concentrated banks respond to market rate falls by reducing their deposit supply as well as their loan supply by more than those of less concentrated banks. I argue this behavior is the response of banks to loan and deposit demand becoming less elastic to market rate changes in low market rates which itself is due to the shift of household assets from the ones that are fully responsive to market rate changes (e.g. money market funds) to those less responsive (e.g. deposits) or irresponsive (e.g. cash) in low market rates. As the market rate falls, The downward pressure of the increased market power and the upward pressure of the traditional channels, cause the non-monotonic response of banks to market rate changes. The results help explain the puzzling slow recovery of the economy as well as stable inflation after the global financial crisis. I also show that local house prices become less responsive to market rate changes in low market rates in the counties that are exposed to high-market-power banks.

Download or read book International Finance Discussion Papers written by and published by . This book was released on 1996 with total page 44 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Credit Intermediation and the Macroeconomy written by Sudipto Bhattacharya and published by . This book was released on 2004 with total page 934 pages. Available in PDF, EPUB and Kindle. Book excerpt: Developments in theories of financial markets and institutions, using the tools of the economics of uncertainty and of contracts, as well as results in game theory, have, over the last two decades, constituted an exciting and burgeoning field of research. This collection of readings drawstogether highlights of the 'second generation' literature in this area, emphasizing the theoretical, institutional, and policy-oriented regulatory implications of some of the key modelling techniques in the field.The collection divides into seven sections covering the monitoring role of banks and other intermediaries; liquidity demand and the role of banks and the government; bank runs and financial crises; bank regulation; inter-bank competition and bank--firm relationships; comparative financial systems;and imperfect credit markets and the macroeconomy. Each section comprises four articles previously published in top-ranking economics and finance journals, plus a discussion by a prominent scholar, who provides a synthesis and critique of the literature, and suggests promising directions for futureresearch and application of results.

Download or read book Essays on Financial Intermediation and Macroeconomic Policy written by Arsenii Olegovich Mishin and published by . This book was released on 2020 with total page 366 pages. Available in PDF, EPUB and Kindle. Book excerpt: This dissertation studies the role of capital requirements in combating excessive risk-taking incentives of banks in two settings.

Download or read book Essays on Financial Intermediation in Developing Countries written by Lucius Antonius Hubertus Laeven and published by . This book was released on 2001 with total page 175 pages. Available in PDF, EPUB and Kindle. Book excerpt: