There is long-standing theoretical debate on the role of collateral in …nancial markets. There is no satisfactory evidence of the causal relationship (if any) between the amount of collateral required and the subsequent probability of overdues. We analyze an exogenous change in the number of cosigners required as collateral on small loans in South India. Our regression discontinuity approach re...

Asset encumbrance is a central concept in the context of banks’ liquidity crises, as it associated with their capacity to obtain secured funding. This occasional paper summarises work carried out by task force on asset encumbrance, bringing together analyses ECB and those national competent authorities working topic. First, we describe how has evolved euro area banks, focusing country business ...

This paper proposes three models of social capital and growth that incorporate different perspectives on the concept of social capital and the empirical evidence gathered to date. In these models, social capital impacts growth by assisting in the accumulation of human capital, by affecting financial development through its effects on collective trust and social norms, and by facilitating networ...

This study examines bank risk by investigating the equity and loan portfolio characteristics of publicly-traded bank holding companies. Unlike the pattern for non-financial firms, equity betas of large banks are two to five times greater than those of small banks. In explaining this, we note that regulation imposes an effective cap on banks’ equity volatility. Because the portfolios of small ba...

To sustain growth in an aging economy, it is important to ease the financing of small firms by bank loans. Using bank internal data of small business loans in Germany, we examine the determinants of loan rates in the period 1995-2010. Beyond characteristics of the firm, the loan contract, and the lending relationship, demographic aspects matter. However, collateral and relationship lending play...

Previous comparative analyses of gross and net settlement have focused on the credit risk of the central counterparty in net settlement arrangements, and on the incentives for participants to alter the risk of the portfolio under net settlement. By modeling the trading economy that generates the demand for payment services, we are able to show some largely unexplored advantages of net settlemen...

Ambivalence in the regulatory definition of capital adequacy for credit risk has recently steered the financial services industry to collateral loan obligations (CLOs) as an important balance sheet management tool. CLOs represent a specialised form of Asset-Backed Securitisation (ABS), with investors acquiring a structured claim on the interest proceeds generated from a portfolio of bank loans ...

Klassen, Christopher L., Jay H. Traverse, and Robert J. Bache. Nitroglycerin dilates coronary collateral vessels during exercise after blockade of endogenous NO production. Am. J. Physiol. 276 (Heart Circ. Physiol. 45): H918–H923, 1999.—In a previous study nitroglycerin failed to dilate coronary collateral vessels during exercise. This study tested the hypothesis that failure of nitroglycerin t...