Collateral Risk, Repo Rollover and Shadow Banking
نویسندگان
چکیده
منابع مشابه
Collateral Circulation and Repo Spreads⇤
I develop a dynamic model of collateral circulation in a repo market, where a continuum of institutions borrow from and lend to one another against illiquid collateral. The model emphasizes an important tradeoff. On one hand, easier collateral circulation makes repos liquid and increases steady state investment through several multiplier effects, improving economic efficiency. On the other hand...
متن کاملBanking and Shadow Banking
Tightening financial regulation squeezes banking activities into the shadow banking sector, which may hurt financial stability and production (Plantin, 2014). Unlike Plantin’s work, we investigate regulations that reduce banks’ leverage and dampen financial amplification effects. Moreover, our paper studies the trade-off between economic growth and financial stability in light of shadow banking...
متن کاملLegal aspects of Shadow Banking
Shadow Banking system, as an investment method, while being an integral part of the supervised banking system, is a rival for banks and governance institutions in financing and oversight. As a result, its development has created a situation for regulated institutions, which leads to concerns about the legal and regulatory responsibilities of the banking and financial system for investment not g...
متن کاملSustainable Shadow Banking
Commercial banks are subject to regulation that restricts their investments. When banks are concerned for their reputation, however, they could self-regulate and invest more efficiently. Hence, a shadow banking that arises to avoid regulation has the potential to improve welfare. Still, reputation concerns depend on future economic prospects and may suddenly disappear, generating a collapse of ...
متن کاملDisclosure and Rollover Risk
This paper studies whether and to what extent transparent disclosure prevents inefficient liquidation arising from rollover risk. We model an illiquid but solvent borrower who can design a public signal about what creditors can recover from forcing liquidation, and what their claims would be worth if the firm survives. We find that the signal structure that minimizes rollover risk never identif...
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ژورنال
عنوان ژورنال: SSRN Electronic Journal
سال: 2014
ISSN: 1556-5068
DOI: 10.2139/ssrn.2496915