Download or read book Financial Crisis and Bank Lending written by Simon H. Kwan and published by DIANE Publishing. This book was released on 2010-10 with total page 43 pages. Available in PDF, EPUB and Kindle. Book excerpt: Estimates the amount of tightening in bank commercial and industrial (C&I) loan rates during the financial crisis. After controlling for loan characteristics and bank fixed effects, as of 2010:Q1, the average C&I loan spread was 66 basis points or 23 percent above normal. From about 2005 to 2008, the loan spread averaged 23 basis points below normal. Thus, from the unusually loose lending conditions in 2007 to the much tighter conditions in 2010:Q1, the average loan spread increased by about 1 percentage point. The author finds that large and medium-sized banks tightened their loan rates more than small banks; while small banks tended to tighten less, they always charged more. Charts and tables.

Download or read book The Financial Crisis Inquiry Report written by Financial Crisis Inquiry Commission and published by Cosimo, Inc.. This book was released on 2011-05-01 with total page 692 pages. Available in PDF, EPUB and Kindle. Book excerpt: The Financial Crisis Inquiry Report, published by the U.S. Government and the Financial Crisis Inquiry Commission in early 2011, is the official government report on the United States financial collapse and the review of major financial institutions that bankrupted and failed, or would have without help from the government. The commission and the report were implemented after Congress passed an act in 2009 to review and prevent fraudulent activity. The report details, among other things, the periods before, during, and after the crisis, what led up to it, and analyses of subprime mortgage lending, credit expansion and banking policies, the collapse of companies like Fannie Mae and Freddie Mac, and the federal bailouts of Lehman and AIG. It also discusses the aftermath of the fallout and our current state. This report should be of interest to anyone concerned about the financial situation in the U.S. and around the world.THE FINANCIAL CRISIS INQUIRY COMMISSION is an independent, bi-partisan, government-appointed panel of 10 people that was created to "examine the causes, domestic and global, of the current financial and economic crisis in the United States." It was established as part of the Fraud Enforcement and Recovery Act of 2009. The commission consisted of private citizens with expertise in economics and finance, banking, housing, market regulation, and consumer protection. They examined and reported on "the collapse of major financial institutions that failed or would have failed if not for exceptional assistance from the government."News Dissector DANNY SCHECHTER is a journalist, blogger and filmmaker. He has been reporting on economic crises since the 1980's when he was with ABC News. His film In Debt We Trust warned of the economic meltdown in 2006. He has since written three books on the subject including Plunder: Investigating Our Economic Calamity (Cosimo Books, 2008), and The Crime Of Our Time: Why Wall Street Is Not Too Big to Jail (Disinfo Books, 2011), a companion to his latest film Plunder The Crime Of Our Time. He can be reached online at www.newsdissector.com.

Download or read book Financial Crises and the Composition of Cross Border Lending written by Mr.Eugenio Cerutti and published by International Monetary Fund. This book was released on 2014-10-16 with total page 59 pages. Available in PDF, EPUB and Kindle. Book excerpt: We examine the composition and drivers of cross-border bank lending between 1995 and 2012, distinguishing between syndicated and non-syndicated loans. We show that on-balance sheet syndicated loan exposures account for almost one third of total cross-border loan exposures during this period. Furthermore, syndicated loan exposures increased during the global financial crisis due to large drawdowns on credit lines extended before the crisis. Our empirical analysis of the drivers of cross-border loan exposures in a large bilateral dataset shows three main results. First, banks with lower levels of capital favor syndicated over other kinds of cross-border loans. Second, borrower country characteristics such as level of development, economic size, and capital account openness, are less important in driving syndicated than non-syndicated loan activity, suggesting a diversification motive for syndication. Third, information asymmetries between lender and borrower countries, which are important both in normal and crisis times, became more binding for both types of cross-border lending activity during the recent crisis.

Download or read book Balance Sheet Strength and Bank Lending During the Global Financial Crisis written by Mr.Tümer Kapan and published by International Monetary Fund. This book was released on 2013-05-08 with total page 38 pages. Available in PDF, EPUB and Kindle. Book excerpt: We examine the role of bank balance sheet strength in the transmission of financial sector shocks to the real economy. Using data from the syndicated loan market, we exploit variation in banks’ reliance on wholesale funding and their structural liquidity positions in 2007Q2 to estimate the impact of exposure to market freezes during 2007–08 on the supply of bank credit. We find that banks with strong balance sheets were better able to maintain lending during the crisis. In particular, banks that were ex-ante more dependent on market funding and had lower structural liquidity reduced the supply of credit more than other banks. However, higher and better-quality capital mitigated this effect. Our results suggest that strong bank balance sheets are key for the recovery of credit following crises, and provide support for regulatory proposals under the Basel III framework.

Download or read book Drivers of Bank Lending written by Hartmut Brinkmeyer and published by Springer. This book was released on 2014-09-24 with total page 247 pages. Available in PDF, EPUB and Kindle. Book excerpt: ​After the recent financial crisis has hooked the banking system to its very foundations, Hartmut Brinkmeyer contributes to the question of how bank characteristics influence bank loan supply during crisis periods by developing a well-founded theoretical framework. The econometrical design deploys a number of remarkably innovative ideas such as the implementation of a bank-specific, self-chosen target capital ratio or a very convincing approach to the disentanglement of loan supply and demand. The results of this study deliver a profound insight into the lending behavior of European banks and explicitly urge academic and practical discussion.

Download or read book Financial Crisis Bank Behaviour and Credit Crunch written by Stefania P.S. Rossi and published by Springer. This book was released on 2015-07-29 with total page 198 pages. Available in PDF, EPUB and Kindle. Book excerpt: ​This book explores some relevant distortions and market failures in financial and banking markets caused by the recent financial crisis and offers important insights to policymakers as well. After having introduced the reader to the economic background behind the origin of the present financial turmoil, the book proposes a distinct angle to look at some macro and microeconomic aspects. The volume discusses whether and to what extent policies, implemented by governments and monetary authorities to countervail bank defaults and avoid a disastrous financial instability, have in some way determined opportunistic conducts (moral hazard), changes in banks’ behaviour, distortive incentives and market failures. Furthermore, the book offers a viewpoint on the effects of the evolution of regulation for the banking sector. Finally, the book assesses how the increase in the cost of funding and the shrinking in credit supply (credit crunch) has modified the financial structure of small and medium firms. To illustrate this, some specific cases at Italian regional level are examined.

Download or read book The Impact of the Global Financial Crisis on Banking Globalization written by Mr.Stijn Claessens and published by International Monetary Fund. This book was released on 2014-10-27 with total page 50 pages. Available in PDF, EPUB and Kindle. Book excerpt: Although cross-border bank lending has fallen sharply since the crisis, extending our bank ownership database from 1995-2009 up to 2013 shows only limited retrenchment in foreign bank presence. While banks from OECD countries reduced their foreign presence (but still represent 89% of foreign bank assets), those from emerging markets and developing countries expanded abroad and doubled their presence. Especially advanced countries hit by a systemic crisis reduced their presence abroad, with far flung and relatively small investments more likely to be sold. Poorer and slower growing countries host fewer banks today, while large investments less likely expanded. Conversely, faster host countries’ growth and closeness to potential investors meant more entry. Lending by foreign banks locally grew more than cross-border bank claims did for the same home-host country combination, and each was driven by different factors. Altogether, our evidence shows that global banking is not becoming more fragmented, but rather is going through some important structural transformations with a greater variety of players and a more regional focus.

Download or read book How Did Bank Lending to Small Business in the United States Fare After the Financial Crisis written by Rebel A. Cole and published by . This book was released on 2019 with total page 77 pages. Available in PDF, EPUB and Kindle. Book excerpt: Aggregate bank-loan data reported by the FDIC show that bank lending to small businesses plummeted during 2009-2011 following the collapse of Lehman Brothers in Sep. 2008 and the onset of the financial crisis, and continued to decline during the post-crisis years 2012-2015. However, the number of banks also declined during both periods, making it difficult to determine if banks have continued, or loosened, the tight-credit policies of 2009-2011. The current study analyzes bank-level data on both the stock and flow of small-business lending collected by U.S. banking regulators to provide new univariate and multivariate evidence on whether bank lending to businesses - small and large - recovered after the financial crisis. The analysis reveals that bank lending to small businesses remained at depressed levels throughout the post-crisis years, while total-business lending saw somewhat of a recovery. Finally, the analysis documents that the declines in small-business lending were significantly greater at large banks than at small banks, and at banks in worse financial condition than at banks in better financial condition.

Download or read book Financial Crises and the Limits of Bank Reform written by Eileen Keller and published by Oxford University Press. This book was released on 2021-05-28 with total page 272 pages. Available in PDF, EPUB and Kindle. Book excerpt: Financial Crises and the Limits of Bank Reform examines the responses that were implemented in France and Germany, two comparable European economies, in the aftermath of the global financial crisis from 2007/2008 with respect to the future economic role of the banks. While France pushed for greater independence from the banks by strengthening financial disintermediation and non-bank intermediation, Germany supported classic bank intermediation. Analysing the reasons for this puzzling difference, this book shows that the main lessons drawn from the crisis were the consequence of differing patterns of social learning, leading to changes in widely shared beliefs of specific aspects of banking. While these were related to the conditions of bank lending and the limits of bank intermediation in France, in Germany they were linked to the risks of financial innovation and financial sector concentration. The book draws on an in-depth analysis of French and German banking and financial sector reforms in the decades prior to the crisis, crisis management, and the responses implemented in the aftermath, featuring extensive interview data with over 70 professionals in addition to profound document and data analysis. It discusses alternative theoretical approaches and spells out the ontological foundations and behavioural implications of the social learning approach to policy change. Contrary to other accounts of the post-crisis reforms concentrating on regulatory change, the author focuses on how evolving financial practices and reform priorities mutually condition each other over time, forming distinctive developmental paths. As this book shows, it is only once we embed the reform options chosen in their specific institutional and socio-economic context that we fully understand the driving forces behind the post-crisis reforms.

Download or read book Property Boom and Banking Bust written by Colin Jones and published by John Wiley & Sons. This book was released on 2018-01-09 with total page 212 pages. Available in PDF, EPUB and Kindle. Book excerpt: A fascinating analysis of the critical role commercial property investment played in the economic boom and bust during the global financial crisis The unprecedented financial boom stretching from the mid-1990s through 2008 ultimately led to the deepest recession in modern times and one of the slowest economic recoveries in history. It also resulted in the emergence of the draconian austerity policies that have swept across Europe in recent years. Property Boom and Banking Bust offers an expert insight into the complex property market dynamics that contributed to the Great Financial Crisis of 2008 and its devastating economic consequences. It is the first book to focus on a woefully underreported dimension of the crisis, namely, the significant role that lending on commercial property development played in the crisis. Among other key topics, the authors explore the philosophical and behavioral factors that propelled irresponsible bank lending and the property boom; how it led to the downfall of the banks; the impact of the credit crunch on the real estate industry generally in the wake of the financial crisis; the catastrophic effects the property bust had on property investors, both large and small; and how the financial institutions have sought to recover in the wake of the financial crisis. Provides valuable insights into what happened in previous booms and busts, particularly in the 1970s and 1980s, and how they compare with the most recent one Offers an expert assessment of the consequences of the global financial crisis for the banking system and the commercial property industry Examines strategies banks have used to recover their positions and manage the overhang of indebtedness and bad property assets Addresses strategies the real estate industry have used to recover from the collapse in property values Written in an accessible style, and featuring numerous insider case accounts from property bankers, Property Boom and Banking Bust disentangles the complex, tightly-woven factors that led to the Great Financial Crisis of 2008, while offering powerful lessons for property industry professionals on how to avoid having history repeat itself.

Download or read book The Maze of Banking written by Gary Gorton and published by Oxford University Press, USA. This book was released on 2015 with total page 690 pages. Available in PDF, EPUB and Kindle. Book excerpt: Financial crises must be studied in the context of history. The Maze of Banking is a collection of academic papers by Gary Gorton---an expert on the financial crisis of 2007-2008---on the history and analysis of banks, banking, and financial crises spanning the past 175 years. These papers provide the framework for understanding how the financial crisis of 2007-2008 developed and what can be done to promote a stabile banking industry and prevent future economic crises.

Download or read book Japan s Financial Crisis and Its Parallels to U S Experience written by Ryōichi Mikitani and published by Peterson Institute. This book was released on 2000 with total page 256 pages. Available in PDF, EPUB and Kindle. Book excerpt: Japan is only one of many industrialized economies to suffer a financial crisis in the past 15 years, but it has suffered the most from its crisis--as measured in lost output and investment opportunities, and in the direct costs of clean-up. Comparing the response of Japanese policy in the 1990s to that of US monetary and financial policy to the American Savings and Loan Crisis of the late 1980s sheds light on the reasons for this outcome. This volume was created by bringing together several leading academics from the United States and Japan--plus former senior policymakers from both countries--to discuss the challenges to Japanese financial and monetary policy in the 1990s. The papers address in turn both the monetary and financial aspects of the crisis, and the discussants bring together broad themes across the two countries' experiences. As the papers in this Special Report demonstrate, while the Japanese government's policy response to its banking crisis in the 1990s was slow in comparison to that of the US government a decade earlier, the underlying dynamics were similar. A combination of mismanaged partial deregulation and regulatory forebearance gave rise to the crisis and allowed it to deepen, and only the closure of some banks and injection of new capital into others began the resolution. The Bank of Japan's monetary policy from the late 1980s onward, however, was increasingly out of step with US or other developed country norms. In particular, the Bank of Japan's limited response to deflation after being granted independence in 1998 stands out as a dangerous and unusual stance.

Download or read book Slapped by the Invisible Hand written by Gary B. Gorton and published by Oxford University Press. This book was released on 2010-03-08 with total page 232 pages. Available in PDF, EPUB and Kindle. Book excerpt: Originally written for a conference of the Federal Reserve, Gary Gorton's "The Panic of 2007" garnered enormous attention and is considered by many to be the most convincing take on the recent economic meltdown. Now, in Slapped by the Invisible Hand, Gorton builds upon this seminal work, explaining how the securitized-banking system, the nexus of financial markets and instruments unknown to most people, stands at the heart of the financial crisis. Gorton shows that the Panic of 2007 was not so different from the Panics of 1907 or of 1893, except that, in 2007, most people had never heard of the markets that were involved, didn't know how they worked, or what their purposes were. Terms like subprime mortgage, asset-backed commercial paper conduit, structured investment vehicle, credit derivative, securitization, or repo market were meaningless. In this superb volume, Gorton makes all of this crystal clear. He shows that the securitized banking system is, in fact, a real banking system, allowing institutional investors and firms to make enormous, short-term deposits. But as any banking system, it was vulnerable to a panic. Indeed the events starting in August 2007 can best be understood not as a retail panic involving individuals, but as a wholesale panic involving institutions, where large financial firms "ran" on other financial firms, making the system insolvent. An authority on banking panics, Gorton is the ideal person to explain the financial calamity of 2007. Indeed, as the crisis unfolded, he was working inside an institution that played a central role in the collapse. Thus, this book presents the unparalleled and invaluable perspective of a top scholar who was also a key insider.

Download or read book Social Banking and Social Finance written by Roland Benedikter and published by Springer Science & Business Media. This book was released on 2011-01-13 with total page 143 pages. Available in PDF, EPUB and Kindle. Book excerpt: For over 2,000 years, banks have served to facilitate the exchange of money and to provide a variety of economic and financial services. During the most recent financial collapse and subsequent recession, beginning in 2008, banks have been vilified as perpetrators of the crisis, the public distrust compounded by massive public bailouts. Nevertheless, another form of banking has also emerged, with a focus on promoting economic sustainability, investing in community, providing opportunity for the disadvantaged, and supporting social, environmental, and ethical agendas. Social Banking and Social Finance traces the emergence of the “bank with a conscience” and proposes a new approach to banking in the wake of the economic crisis. Featuring innovations and initiatives in banking from Europe, Canada, and the United States, Roland Benedikter presents an alternative to traditional banking practices that are focused exclusively on profit maximization. He argues that social banking is not about changing the system, but about improving some of its core features by putting into use the "triple bottom line" principle of profit-people-planet. Important lessons can be learned by the success of social banks that may be useful for the greater task of improving the global financial system and avoiding economic crises in the future.

Download or read book The Value of Relationship Banking During Financial Crises written by Giovanni Ferri and published by World Bank Publications. This book was released on 2001 with total page 48 pages. Available in PDF, EPUB and Kindle. Book excerpt: Relationship banking, with surviving banks, has a positive value during a systemic financial crisis. For many viable small and medium-size businesses in the Republic of Korea, relationship banking reduced liquidity constraints and thus diminished the probability of unwarranted bankruptcy during the country's financial crisis of 1997-98.

Download or read book Basel III and Bank Lending Evidence from the United States and Europe written by Mr.Sami Ben Naceur and published by International Monetary Fund. This book was released on 2017-11-15 with total page 54 pages. Available in PDF, EPUB and Kindle. Book excerpt: Using data on commercial banks in the United States and Europe, this paper analyses the impact of the new Basel III capital and liquidity regulation on bank-lending following the 2008 financial crisis. We find that U.S. banks reinforce their risk absorption capacities when expanding their credit activities. Capital ratios have significant, negative impacts on bank-retail-and-other-lending-growth for large European banks in the context of deleveraging and the “credit crunch” in Europe over the post-2008 financial crisis period. Additionally, liquidity indicators have positive but perverse effects on bank-lending-growth, which supports the need to consider heterogeneous banks’ characteristics and behaviors when implementing new regulatory policies.

Download or read book Accounting discretion of banks during a financial crisis written by Mr.Luc Laeven and published by International Monetary Fund. This book was released on 2009-09-01 with total page 43 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper shows that banks use accounting discretion to overstate the value of distressed assets. Banks' balance sheets overvalue real estate-related assets compared to the market value of these assets, especially during the U.S. mortgage crisis. Share prices of banks with large exposure to mortgage-backed securities also react favorably to recent changes in accounting rules that relax fair-value accounting, and these banks provision less for bad loans. Furthermore, distressed banks use discretion in the classification of mortgage-backed securities to inflate their books. Our results indicate that banks' balance sheets offer a distorted view of the financial health of the banks.