Download or read book Essays on Financial Stability and Corporate Finance written by Mónica López-Puertas Lamy and published by . This book was released on 2011 with total page 225 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Summary of the Thesis Essays on Financial Stability and Corporate Finance written by Mónica López-Puertas Lamy and published by Ed. Universidad de Cantabria. This book was released on 2014-01-20 with total page 32 pages. Available in PDF, EPUB and Kindle. Book excerpt: El principal objetivo de este trabajo consiste en analizar los efectos que la estructura de propiedad bancaria tiene sobre la toma de riesgos, a nivel microeconómico y sobre el riesgo sistémico, a nivel macroeconómico. Para ello se desarrolla un modelo de competencia oligopolística y se analizan las propiedades del equilibrio de mercado en términos de beneficios, cuota de mercado y micro y macro estabilidad financiera cuando un banco comercial, maximizador de beneficios, compite contra un banco no orientado hacia los beneficios (stakeholder bank). Los resultados teóricos son validados empíricamente usando datos bancarios de 72 países durante el periodo 1997-2007. Concretamente se muestra que a) los stakeholder banks son menos arriesgados que los bancos comerciales, b) cualquier banco es más arriesgado cuando compite contra un stakeholder bank en lugar de contra un banco comercial, c) a nivel sistémico la presencia de stakeholder banks aumenta la estabilidad financiera, d) el efecto de la regulación bancaria y de la competencia en la toma de riesgos depende de la estructura de propiedad del banco, e) la concentración accionarial incrementa el riesgo bancario, f) el diseño de los incentivos gerenciales tiene un efecto muy significativo sobre la toma de riesgos bancarios.

Download or read book Essays on Corporate Finance and Macroeconomics written by Ikuo Takei and published by . This book was released on 2021 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: In Chapter 1, I estimate a heterogeneous firm model on dynamic adverse selection with screening and signaling in public debt markets for privately informed persistent productivity, and quantify the effect of asymmetric information on misallocation of capital and financial liabilities. The firm's manager chooses between public debt (e.g., corporate bonds), priced on the accumulation of borrower's history, and monitored private debt (e.g., bank loans), allowing costly monitoring to be an imperfect substitute for reputation building. Cross-subsidization caused by asymmetric information in public debt markets leads to overinvestment of low productivity firms and capital misallocation. A good reputation lowers borrowing costs from public lenders. The firm's manager uses leverage and equity to send a good signal. However, neither reputation building nor monitored private debt substantially remove capital misallocation. I find precise information associated with productivity increases total factor productivity, decreases the variance of the marginal product of capital, and increases consumption by 1.4%. Less demand for monitoring lowers aggregate bank debt ratio by 6 percentage points. In the counterfactual policy analysis, the taxation of debt forgiveness under Chapter 11 reorganization generates a rise in consumer welfare by reducing low productivity firms' incentive to overborrow. Chapter 2 studies bank risk-taking. To understand bank risk-taking incentives, I construct a novel dataset of small and medium-sized U.S. bank Chief Executive Officer (CEO) compensation contracts and bank financials. First, I find empirical evidence of bonus and stock option compensations that explain the bank's poor performance and failure during the financial crisis of 2007-2009. Second, I quantitatively evaluate regulatory policies for bank CEO compensation to promote long-run financial stability. I develop a dynamic model of banking with agency conflicts to characterize the effect of shares owned, bonuses, and stock options on risk-taking. The bank CEO faces trade-offs between short-termism for immediate payment of cash and long-termism for stability subject to costs of external equity issuance under capital regulation and deposit insurance. The model is calibrated to U.S. data using the novel dataset. Counterfactual analysis shows that the Euro bonus cap and U.K. remuneration code - limitations to the ability of the bonus payment - improve financial stability and welfare. Finally, I argue that the Dodd-Frank proposal of 2016, which included a combination of deferred dividends and bonuses, has a further improvement according to the model prediction. Heterogeneity in compensation among bank CEOs has aggregate consequences of designing a proper compensation system.

Download or read book Can It Happen Again written by Hyman Minsky and published by Routledge. This book was released on 2016-04-14 with total page 329 pages. Available in PDF, EPUB and Kindle. Book excerpt: In the winter of 1933, the American financial and economic system collapsed. Since then economists, policy makers and financial analysts throughout the world have been haunted by the question of whether "It" can happen again. In 2008 "It" very nearly happened again as banks and mortgage lenders in the USA and beyond collapsed. The disaster sent economists, bankers and policy makers back to the ideas of Hyman Minsky – whose celebrated 'Financial Instability Hypothesis' is widely regarded as predicting the crash of 2008 – and led Wall Street and beyond as to dub it as the 'Minsky Moment'. In this book Minsky presents some of his most important economic theories. He defines "It", determines whether or not "It" can happen again, and attempts to understand why, at the time of writing in the early 1980s, "It" had not happened again. He deals with microeconomic theory, the evolution of monetary institutions, and Federal Reserve policy. Minsky argues that any economic theory which separates what economists call the 'real' economy from the financial system is bound to fail. Whilst the processes that cause financial instability are an inescapable part of the capitalist economy, Minsky also argues that financial instability need not lead to a great depression. This Routledge Classics edition includes a new foreword by Jan Toporowski.

Download or read book Why the World Economy Needs a Financial Crash and Other Critical Essays on Finance and Financial Economics written by Jan Toporowski and published by Anthem Press. This book was released on 2010-12-01 with total page 158 pages. Available in PDF, EPUB and Kindle. Book excerpt: The essays in this volume explain the key structural features of financial inflation that give rise to financial crisis. These features include excessive reliance on finance to maintain economic activity through rising asset prices. Reliance on asset inflation induces a preoccupation with property values and a new social divide between the asset-rich and the asset-poor that undermines the culture of the welfare state. When debt can no longer be supported by cash flow from asset markets, excess debt plunges economies into economic depression.

Download or read book Essays on Financial Analytics written by Pascal Alphonse and published by Springer Nature. This book was released on with total page 344 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Public Policy Financial Economics Essays In Honor Of Professor George G Kaufman For His Lifelong Contributions To The Profession written by Douglas D Evanoff and published by World Scientific. This book was released on 2018-03-08 with total page 313 pages. Available in PDF, EPUB and Kindle. Book excerpt: The central goal of this volume was to assemble outstanding scholars and policymakers in the field of financial markets and institutions and have them articulate significant market developments in their particular areas of expertise during the past few decades.Not just a celebratory volume, Public Policy and Financial Economics selected internationally recognized financial economists who have worked with Professor Kaufman during his years of scholarly research, and have a combined mastery of specialized financial markets themes and, very importantly, knowledge of public policies in the areas. All 15 chapters offer unique, innovative, and exciting expositions of several critical topics in financial economics.

Download or read book Three Essays in Empirical Corporate Finance written by Shage Zhang and published by . This book was released on 2012 with total page 200 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Three Essays on Corporate Finance written by Haiwei Jing and published by . This book was released on 2015 with total page 210 pages. Available in PDF, EPUB and Kindle. Book excerpt: Chapter 1 hypothesizes that some banks specialize in providing monitoring capital, which includes monitoring services in addition to financial capital, and that such specialization leads them to focus their lending on financially weak firms. I test this hypothesis by constructing a variety of novel measures of banks' monitoring skills and find that financially weak firms are more likely to match with banks that have high monitoring skills and that shocks to firms' financial strength cause them to switch to banks that are a better fit to their new monitoring needs. Chapter 2 investigates how the switching cost, as a result of informational frictions, affects firms' migration behavior. I propose a novel mechanism whereby banks can coordinate with other institutions with which they conduct business; when a relationship bank determines that its firm matching is inefficient, under some conditions, it can transfer the firm to the bank's partner. Using the loan spread residual as a proxy for unobservable credit shocks, I find consistent evidence that a firm with a larger magnitude residual has a higher likelihood of going to a bank that is not a relationship bank but rather a syndicate partner of its relationship bank; and when the spread residual is positively large, the bank partner to which the firm switches tends to put a high stake in the syndicate, which is consistent with its monitoring role for a distressed firm. Chapter 3 proposes that alliances are a channel for merger propagation when partnering firms have complementary resources. I confirm the mechanism's main prediction using US data on corporate alliances and merger activity: The likelihood that a firm will be involved in mergers and acquisition (M\&A) increases significantly if its partners have also engaged in M\&A during the previous two years. My empirical result is not explained by industry-wide M\&A activity or company characteristics. I present three additional empirical results: (i) The propagation effect is stronger when I include proxies for the strength of post-partner-merger resource reallocation, which is consistent with the mechanism, (ii) merger propagation effects are not merely localized but rather diffuse through the alliance network, and (iii) partner mergers also lead to a higher likelihood of entering new alliances.

Download or read book Financial Conditions and Macroeconomic Performance written by Steven M. Fazzari and published by Routledge. This book was released on 2015-06-05 with total page 209 pages. Available in PDF, EPUB and Kindle. Book excerpt: This collection of papers on financial instability and its impact on macroeconomic performance honours Hyman P. Minsky and his lifelong work. It is based on a conference at Washington University, St. Louis, in 1990 and includes among the authors Benjamin M. Friedman, Charles P. Kindleberger, Jan Kregel and Steven Fazzari. These papers consider Minsky's definitive analysis that yields such a clear and disturbing sequence of financial events: booms, government intervention to prevent debt contraction and new booms that cause a progressive buildup of new debt, eventually leaving the economy much more fragile financially.

Download or read book Essays in International Corporate Finance written by Julio César Riutort and published by . This book was released on 2011 with total page 284 pages. Available in PDF, EPUB and Kindle. Book excerpt: This dissertation consists of three essays in international corporate finance. It studies the impact of aggregate conditions and the institutional environment on the behavior of publicly traded firms from a broad sample of countries. In the first essay I argue that when credit constraints are widespread, as may be the case in countries with poor investor protection, we should not necessarily expect small firms' investment to be more sensitive to monetary contractions or negative aggregate shocks. A simple model of investment with credit constraints shows that for this pattern to occur we need a high enough level of investor protection. The empirical evidence is broadly consistent with the hypothesis. In periods of tight credit conditions, small firms from countries with high creditor protection contract their investment rate more than large firms, while there is no significant difference in the investment contraction of small and large firms in from low creditor protection countries. In the second essay I explore to what extent the effect of legal origin on payout policy, ownership concentration, and valuation has been stable through time. The results suggest that previously established results should be taken with caution, and cast doubts on their strength. In particular, it appears that corporate characteristics are converging across countries, and legal origin is not longer an important determinant of them. In the final essay I study to what extent capital raising in international markets is related to firms' ability to react to financial shocks. I provide a complete descriptive picture of the main patterns in the use of international financing between 1990 and 2009,study how issuers and non-issuers grow during financial crises, and how their growth is related to the aggregate conditions in the economy and their past financing behavior. Firms that raise capital internationally have a lower correlation with the local GDP growth, and grow more during local financial crises; however this relationship depends on the overall degree of development of the country and is highly dependent on the determinants of the issuance decision. The descriptive analysis show that international capital raising is pervasive in most countries, but the firms doing so differ depending on the development of their country of origin.

Download or read book Restoring Financial Stability written by New York University Stern School of Business and published by John Wiley & Sons. This book was released on 2009-03-23 with total page 416 pages. Available in PDF, EPUB and Kindle. Book excerpt: An insightful look at how to reform our broken financial system The financial crisis that unfolded in September 2008 transformed the United States and world economies. As each day's headlines brought stories of bank failures and rescues, government policies drawn and redrawn against the backdrop of an historic Presidential election, and solutions that seemed to be discarded almost as soon as they were proposed, a group of thirty-three academics at New York University Stern School of Business began tackling the hard questions behind the headlines. Representing fields of finance, economics, and accounting, these professors-led by Dean Thomas Cooley and Vice Dean Ingo Walter-shaped eighteen independent policy papers that proposed market-focused solutions to the problems within a common framework. In December, with great urgency, they sent hand-bound copies to Washington. Restoring Financial Stability is the culmination of their work. Proposes bold, yet principled approaches-including financial policy alternatives and specific courses of action-to deal with this unprecedented, systemic financial crisis Created by the contributions of various academics from New York University's Stern School of Business Provides important perspectives on both the causes of the global financial crisis as well as proposed solutions to ensure it doesn't happen again Contains detailed evaluations and analyses covering many spectrums of the marketplace Edited by Matthew Richardson and Viral Acharya, this reliable resource brings together the best thinking of finance and economics from the faculty of one of the top universities in world.

Download or read book Minding the Markets written by D. Tuckett and published by Springer. This book was released on 2011-05-27 with total page 250 pages. Available in PDF, EPUB and Kindle. Book excerpt: Tuckett argues that most economists' explanations of the financial crisis miss its essence; they ignore critical components of human psychology. He offers a deeper understanding of financial market behaviour and investment processes by recognizing the role played by unconscious needs and fears in all investment activity.

Download or read book Global Financial Stability Report October 2019 written by International Monetary Fund. Monetary and Capital Markets Department and published by International Monetary Fund. This book was released on 2019-10-16 with total page 109 pages. Available in PDF, EPUB and Kindle. Book excerpt: The October 2019 Global Financial Stability Report (GFSR) identifies the current key vulnerabilities in the global financial system as the rise in corporate debt burdens, increasing holdings of riskier and more illiquid assets by institutional investors, and growing reliance on external borrowing by emerging and frontier market economies. The report proposes that policymakers mitigate these risks through stricter supervisory and macroprudential oversight of firms, strengthened oversight and disclosure for institutional investors, and the implementation of prudent sovereign debt management practices and frameworks for emerging and frontier market economies.

Download or read book Global Financial Stability Report April 2021 written by International Monetary Fund and published by International Monetary Fund. This book was released on 2021-04-06 with total page 92 pages. Available in PDF, EPUB and Kindle. Book excerpt: Extraordinary policy measures have eased financial conditions and supported the economy, helping to contain financial stability risks. Chapter 1 warns that there is a pressing need to act to avoid a legacy of vulnerabilities while avoiding a broad tightening of financial conditions. Actions taken during the pandemic may have unintended consequences such as stretched valuations and rising financial vulnerabilities. The recovery is also expected to be asynchronous and divergent between advanced and emerging market economies. Given large external financing needs, several emerging markets face challenges, especially if a persistent rise in US rates brings about a repricing of risk and tighter financial conditions. The corporate sector in many countries is emerging from the pandemic overindebted, with notable differences depending on firm size and sector. Concerns about the credit quality of hard-hit borrowers and profitability are likely to weigh on the risk appetite of banks. Chapter 2 studies leverage in the nonfinancial private sector before and during the COVID-19 crisis, pointing out that policymakers face a trade-off between boosting growth in the short term by facilitating an easing of financial conditions and containing future downside risks. This trade-off may be amplified by the existing high and rapidly building leverage, increasing downside risks to future growth. The appropriate timing for deployment of macroprudential tools should be country-specific, depending on the pace of recovery, vulnerabilities, and policy tools available. Chapter 3 turns to the impact of the COVID-19 crisis on the commercial real estate sector. While there is little evidence of large price misalignments at the onset of the pandemic, signs of overvaluation have now emerged in some economies. Misalignments in commercial real estate prices, especially if they interact with other vulnerabilities, increase downside risks to future growth due to the possibility of sharp price corrections.

Download or read book Essays on Financial Economics written by Hyo Jin Sonn and published by . This book was released on 2019 with total page 101 pages. Available in PDF, EPUB and Kindle. Book excerpt: The thesis studies the topics of financial stability and their implication for financial economics. An exogenous shock to the financial system is critical because it can further result in an economic downturn. One of the reasons is that the financial system acts as a hub connecting all financial activities in the economy. In this thesis, I explain the mechanism of the shock transmission in the interconnected financial system and the real effect on the economy. In the first chapter, I discuss the impact of the oil price shock in 2014, which acted as a credit supply shock. Using the syndicated loan data, I find that the banks with high exposure to the oil price shock increased the loan interest rates for the new loans more than the banks with low exposure. In the second chapter, I investigate the real effects to the corporate borrowers after the credit supply shock. I find that the borrowing firms' investment spending decreased after the credit supply shock and the amount of cash holding mitigates the impact of the shock. Lastly, in the third chapter, I take a broader approach of studying financial stability. I investigate how the commonality of asset holdings of the banks can increase the systemic risk. In particular, I argue that the commonality of asset holdings make the financial system more vulnerable to a systemic event.

Download or read book The Theory and Practice of Financial Stability written by Andrew Crockett and published by . This book was released on 1997 with total page 62 pages. Available in PDF, EPUB and Kindle. Book excerpt: