The outcomes indicate that bank downfalls cure then economic progress

Blogged because the: Kupiec, Paul H. and Carlos D. Ramirez. “Bank Downfalls while the Cost of General Exposure: Research from 1900-1930.” Log out-of Economic Intermediation twenty-two, no. step three (2013): 285-307.

So it paper investigates the outcome off financial problems towards the financial growth playing with analysis from 1900 to 1930, a time that predates productive authorities stabilizing regulations and has symptoms away from bank operating system stress which aren’t coincident that have recessions. Using one another VAR and you can a change-in-change strategy you to exploits the fresh new reactions of the New york and you will Connecticut economic climates for the Stress of 1907, we guess the Geraldine loans latest impact out of lender problems on the economic passion. More this period, a 0.twelve % (step 1 basic departure) increase in the obligations of your own hit a brick wall depository associations causes a reduced total of 17 fee things on the rate of growth regarding industrial manufacturing and you can a 4 commission section reduction in real GNP growth.

Blogged once the: Jorion, Philippe and you will Gaiyan Zhang. “Credit Contagion out of Counterparty Exposure.” Brand new Diary out of Fund 64, no. 5 (2009): 2053-2087.

Basic borrowing from the bank chance designs dont give an explanation for seen clustering from default, possibly described as “borrowing contagion.” That it papers has the very first empirical research of borrowing from the bank contagion thru lead counterparty outcomes. We view new wealth results of personal bankruptcy notices towards financial institutions using a new database. Typically, loan providers experience severe bad unpredictable equity yields and you can expands for the Dvds spreads. On top of that, creditors may have problems with monetary distress later on. These effects was stronger to possess commercial financial institutions than just financials. Simulations calibrated to those abilities signify counterparty risk can potentially give an explanation for seen too-much clustering out-of non-payments. This suggests one to counterparty risk is an important extra channel off borrowing from the bank contagion and therefore newest profile credit chance models understate the probability of high losses.

The newest reductions exists within three-quarters of your own initial lender inability wonder and will getting interpreted just like the a way of measuring the costs off general risk about financial markets

Put Insurance policies and you may Financial Exposure-Taking: Evidence from Internal Mortgage Product reviews FDIC Cardiovascular system for Monetary Research Performing Papers Zero. 2008-07 Vasso P. Ioannidou and you will Maria Fabiana Penas

Typed while the: Ioannidou, Vasso P. and you can Maria Fabiana Penas. “Deposit Insurance rates and you can Bank Chance-Taking: Research away from Interior Loan Product reviews.” Journal away from Economic Intermediation 19, zero. step 1 (2010): 95-115.

This paper analyzes the end result from put insurance on the banks’ risk-taking in the new perspective from a natural try out using detailed credit registry data. I studies the outcome off an emerging savings, Bolivia, one brought a deposit insurance program from inside the test months, and in addition we examine banks’ chance-delivering pre and post the introduction of this program. e., money that have bad critiques at the origination). Such fund carry high interest rates consequently they are associated with worse ex-article efficiency. We and additionally discover that security conditions and loan maturities aren’t adjusted to pay into extra exposure. Extra efficiency suggest that the rise into the chance-getting comes from a reduction in sector punishment off highest depositors. Our conclusions together with recommend that variations in risk-getting between highest (too-big-to-fail) and you may short banking companies reduced immediately after deposit insurance policies.

Hedge Finance Activism, Business Governance, and you will Firm Efficiency FDIC Center having Economic Search Functioning Papers No. 2008-06 Vasso P. Ioannidou and you may Maria Fabiana Penas

We find that when the development of put insurance rates, financial institutions are more likely to initiate riskier fund (we

Had written while the: Brav, Alon, Wei Jiang, Frank Partnoy, and you may Randall Thomas. “Hedge Funds Activism, Corporate Governance, and you can Company Performance.” Brand new Journal from Loans 63, zero. cuatro (2008): 1729-1775.

Having fun with a massive hand-collected dataset out-of 2001 so you can 2006, we find you to definitely activist hedge loans throughout the U.S. propose proper, functional, and you may financial remedies and attain profits or partial triumph in two thirds of your instances. Hedge financing seldom seek handle and in most cases is actually nonconfrontational. The fresh abnormal return within the announcement out of activism is approximately 7%, and no reverse inside further 12 months. Address firms sense increases from inside the payment, doing work show, and better President return immediately following activism. Our research provides important new evidence on the elements and you can outcomes out-of informed stockholder keeping track of.