منابع مشابه
Countercyclical Bank Equity Issuance∗
It is well established that equity issuance for most non-financial firms is procyclical. This paper shows that, in contrast, equity issuance for banks is countercyclical across credit cycles after 1980, as is retained income. Thus, during credit booms, banks raise less equity, even though more equity might help banks better absorb shocks. This paper shows that government guarantees play a cruci...
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We highlight the ex ante risk-shifting incentives faced by a bank’s shareholders/managers when CoCos (contingent convertible capital) are part of the capital structure. The risk shifting incentive arises from the wealth transfers that the shareholders will receive upon the CoCo’s conversion under CoCo designs widely used in practice. Specifically we show that for principal writedown and nondilu...
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O ver the course of the recent financial crisis, several large financial institutions experienced sudden, massive withdrawals of their usual funding sources. In the U.K., for example, depositors lost confidence in the bank Northern Rock and started a run of withdrawals that ended with the bank being taken into state ownership. In the United States, the investment bank Bear Stearns and the comme...
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We use a model of mean-shifting investment technologies to study the relationship between market structure, risk taking and social welfare in lending markets. Introduction of loan market competition is shown to reduce lending rates and to generate higher investments without increasing the equilibrium bankruptcy risk of borrowers. Hence, there need not be a tradeo between lending market competi...
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We show real effects in the banking sector that emanate from financial reporting transparency in the industrial sector. Prior research documents that transparency improves industrial firms’ access to arm’s-length financing via capital markets. We posit that this diminished reliance on banks increases competition in banks’ product markets, and forces them to offset their lost rents by (i) taking...
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ژورنال
عنوان ژورنال: Journal of Financial Economics
سال: 2020
ISSN: 0304-405X
DOI: 10.1016/j.jfineco.2020.06.008