|
on Banking |
| By: | Donald P. Morgan; Stavros Peristiani; Vanessa Savino |
| Abstract: | We investigate whether the “stress test,” the extraordinary examination of the nineteen largest U.S. bank holding companies conducted by federal bank supervisors in 2009, produced the information demanded by the market. Using standard event study techniques, we find that the market had largely deciphered on its own which banks would have capital gaps before the stress test results were revealed, but that the market was informed by the size of the gap; given our proxy for the expected gap, banks with larger capital gaps experienced more negative abnormal returns. Our findings suggest that the stress test helped quell the financial panic by producing vital information about banks. Our findings also contribute to the academic literature on bank opacity and the value of government monitoring of banks. |
| Keywords: | Bank capital ; Bank examination ; Bank holding companies |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fednsr:460&r=ban |
| By: | Sumit Agarwal; Souphala Chomsisengphet; Chunlin Liu; Nicholas S. Souleles |
| Abstract: | This paper empirically examines the benefits of relationship banking to banks, in the context of consumer credit markets. Using a unique panel dataset that contains comprehensive information about the relationships between a large bank and its credit card customers, we estimate the effects of relationship banking on the customers' default, attrition, and utilization behavior. We find that relationship accounts exhibit lower probabilities of default and attrition, and have higher utilization rates, compared to non-relationship accounts, ceteris paribus. Such effects become more pronounced with increases in various measures of the strength of the relationships, such as relationship breadth, depth, length, and proximity. Moreover, dynamic information about changes in the behavior of a customer’s other accounts at the bank, such as changes in checking and savings balances, helps predict and thus monitor the behavior of the credit card account over time. These results imply significant potential benefits of relationship banking to banks in the retail credit market. |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedhwp:wp-2010-05&r=ban |
| By: | Rocco Huang (Federal Reserve Bank of Philadelphia, Ten Independence Mall, Philadelphia, PA 19106-1574, USA.); Lev Ratnovski (International Monetary Fund, 700 19 th St NW, Washington DC 20431, USA.) |
| Abstract: | Banks increasingly use short-term wholesale funds to supplement traditional retail deposits. Existing literature mainly points to the "bright side" of wholesale funding: sophisticated nanciers can monitor banks, disciplining bad but re financing good ones. This paper models a "dark side" of wholesale funding. In an environment with a costless but noisy public signal on bank project quality, short-term wholesale financiers have lower incentives to conduct costly monitoring, and instead may withdraw based on negative public signals, triggering inefficient liquidations. Comparative statics suggest that such distortions of incentives are smaller when public signals are less relevant and project liquidation costs are higher, e.g., when banks hold mostly relationship-based small business loans. JEL Classification: G21, G28, G33. |
| Keywords: | Financial Crises, Liquidity Risk, Wholesale Funding, Regulation. |
| Date: | 2010–07 |
| URL: | http://d.repec.org/n?u=RePEc:ecb:ecbwps:20101223&r=ban |
| By: | Matteo Ciccarelli (European Central Bank, Kaiserstrasse 29, 60311 Frankfurt am Main, Germany.); Angela Maddaloni (European Central Bank, Kaiserstrasse 29, 60311 Frankfurt am Main, Germany.); José-Luis Peydró (European Central Bank, Kaiserstrasse 29, 60311 Frankfurt am Main, Germany.) |
| Abstract: | Any empirical analysis of the credit channel faces a key identification challenge: changes in credit supply and demand are difficult to disentangle. To address this issue, we use the detailed answers from the US and the confidential and unique Euro area bank lending surveys. Embedding this information within a standard VAR model, we find that: (1) the credit channel is active through the balance-sheets of households, firms and banks; (2) the credit channel amplifies the impact of a monetary policy shock on GDP and inflation; (3) for business loans, the impact through the (supply) bank lending channel is higher than through the demand and balance-sheet channels. For household loans the demand channel is the strongest; (4) during the crisis, credit supply restrictions to firms in the Euro area and tighter standards for mortgage loans in the US contributed significantly to the reduction in GDP. JEL Classification: E32, E44, E5, G01, G21. |
| Keywords: | Non-financial borrower balance-sheet channel, Bank lending channel, Credit channel, Credit crunch, Lending standards, Monetary policy. |
| Date: | 2010–07 |
| URL: | http://d.repec.org/n?u=RePEc:ecb:ecbwps:20101228&r=ban |
| By: | Mohamed Belhaj (GREQAM - Groupement de Recherche en Économie Quantitative d'Aix-Marseille - Université de la Méditerranée - Aix-Marseille II - Université Paul Cézanne - Aix-Marseille III - Ecole des Hautes Etudes en Sciences Sociales (EHESS) - CNRS : UMR6579) |
| Abstract: | This paper proposes a simple continuous time model to analyze capital charges for operational risk. We find that undercapitalized banks have less incentives to reduce their operational risk exposure. We view operational risk charge as a tool to reduce the moral hazard problem. Our results show, that only Advanced Measurement Approach may create appropriate incentives to reduce the frequency of operational losses, while Basic Indicator Approach appears counterproductive. |
| Keywords: | Operational Risk, Capital Requirements, Dividends, Basel Accords |
| Date: | 2010–07–20 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:halshs-00504163_v1&r=ban |
| By: | Sebnem Kalemli-Ozcan (University of Houston, Department of Economics, Houston, TX, 77204, USA.); Elias Papaioannou (Dartmouth College, 6106 Rockefeller Hall, 319 Silsby Hanover, NH 03755, USA.); José-Luis Peydró (European Central Bank, Kaiserstrasse 29, 60311 Frankfurt am Main, Germany.) |
| Abstract: | We identify the effect of financial integration on international business cycle synchronization, by utilizing a confidential database on banks’ bilateral exposure and employing a country-pair panel instrumental variables approach. Countries that become more integrated over time have less synchronized growth patterns, conditional on global shocks and country-pair factors. To account for reverse causality and measurement error, we exploit variation in the transposition dates of financial legislation. We find that increases in financial integration stemming from regulatory harmonization policies are followed by more divergent cycles. Our results contrast with those of the previous studies which suffer from the standard identification problems. JEL Classification: E32, F15, F36, G21, G28, O16. |
| Keywords: | Banking Integration, Co-movement, Fluctuations, Financial Legislation. |
| Date: | 2010–07 |
| URL: | http://d.repec.org/n?u=RePEc:ecb:ecbwps:20101221&r=ban |
| By: | Davide Furceri (OECD and University of Palermo); Aleksandra Zdzienicka (Université de Lyon, Lyon, F-69003, France; CNRS, GATE Lyon St Etienne, UMR 5824, 93, chemin des Mouilles, Ecully, F-69130, France; ENS-LSH, Lyon, France) |
| Abstract: | The aim of this paper is to assess the consequences of banking crises on public debt. Using an unbalanced panel of 154 countries from 1980 to 2006, the paper shows that banking crises produce a significant and long-lasting increase in government debt. The effect is a function of the severity of the crisis. In particular, we find that for severe crises, comparable to the most recent one in terms of output losses, banking crises are followed by a medium-term increase of about 37 percentage points in the government gross debt-to-GDP ratio. We also find that the debt ratio increased more in smaller countries, with worse initial fiscal positions and with a lower quality of institutions (in terms of political stability and democracy). The increase in government debt is also a function of the size of the fiscal stimulus to counter the economic downturns and varies with the type of banking intervention policy, with liquidity support to banks associated with a larger increase in public debt. |
| Keywords: | Output Growth, Financial Crisis, CEECs |
| JEL: | G1 E6 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:gat:wpaper:1015&r=ban |
| By: | Kozo Ueda (Director and Senior Economist, Institute for Monetary and Economic Studies, Bank of Japan (E-mail: kouzou.ueda boj.or.jp)) |
| Abstract: | This paper constructs a two-country DSGE model to study the nature of the recent financial crisis and its effects that spread immediately throughout the world owing to the globalization of banking. In the model, financial intermediaries (FIs) enter into chained credit contracts at home and abroad, engaging in cross-border lending to entrepreneurs by undertaking cross-border borrowing from investors. The FIs as well as the entrepreneurs in two countries are credit constrained, so all of their net worths matter. Our model reveals that under FIs' globalization, adverse shocks that hit one country affect the other, yielding business cycle synchronization on both the real and financial sides. It also suggests that the FIs' globalization, net worth shock, and credit constraints are key to understanding the recent financial crisis. |
| Keywords: | Financial accelerator, financial intermediaries, correlation ( quantity) puzzle, business cycle synchronization, contagion, monetary policy |
| JEL: | E22 E32 E44 E52 F41 |
| Date: | 2010–07 |
| URL: | http://d.repec.org/n?u=RePEc:ime:imedps:10-e-16&r=ban |
| By: | Inci Ötker; Jiri Podpiera |
| Abstract: | This paper attempts to identify the fundamental variables that drive the credit default swaps during the initial phase of distress in selected European Large Complex Financial Institutions (LCFIs). It uses yearly data over 2004 - 08 for 29 European LCFIs. The results from a dynamic panel data estimator show that LCFIs’ business models, earnings potential, and economic uncertainty (represented by market expectations about the future risks of a particular LCFI and market views on prospects for economic growth) are among the most significant determinants of credit risk. The findings of the paper are broadly consistent with those of the literature on bank failure, where the determinants of the latter include the entire CAMELS structure - that is, Capital Adequacy, Asset Quality, Management Quality, Earnings Potential, Liquidity, and Sensitivity to Market Risk. By establishing a link between the financial and market fundamentals of LCFIs and their CDS spreads, the paper offers a potential tool for fundamentals-based vulnerability and early warning system for LCFIs. |
| Date: | 2010–06–29 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:10/153&r=ban |
| By: | Nair, Ajai; Fissha, Azeb |
| Abstract: | Before the late 1970s, rural dwellers in Ghana had almost no access to institutional credit for farm and nonfarm activities, and in many rural communities, secure, safe, and convenient savings and payment facilities hardly existed. In response to this situation, the Government of Ghana took several measures to increase access to credit in rural areas, including facilitating the establishment of rural and community banks (RCBs). This brief discusses the history of RCBs, their business model, their services, and their financial performance. It then draws some lessons relevant for others involved in or planning similar initiatives. As a network, RCBs are the largest providers of formal financial services in Ghana’s rural areas. By the end of 2008, Ghana had 127 RCBs with a total 584 service outlets, representing about half of the total banking outlets in the country. The RCB network reaches about 2.8 million depositors and 680,000 borrowers. Although the service delivery performance of the RCB network has been strong, its financial performance has been mixed. The profitability and net worth of the network have grown, but the financial performance of some members has been poor, and a small number are insolvent. |
| Keywords: | credit, Financial institutions, rural and community banks (RCBs), rural areas, rural banking, savings, |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:fpr:2020br:18(5)&r=ban |
| By: | Pedro Pita Barros; Diana Bonfim; Moshe Kim; Nuno C. Martins |
| Abstract: | Estimating the impact of bank mergers on credit granted and on interest rates requires a framework that allows to disentangle the effect of changes in market structure generated by mergers from the effects arising from changes in banks’ operating environment. However, most of the literature on the impact of bank mergers relies on a simple differential analysis of the relevant variables. We propose a new methodology. It relies on the estimation of a structural model of the credit market. Using this model we are able to derive a counterfactual scenario, considering the pre-merger market equilibrium together with the post-merger environment. The counterfactual analysis makes possible to take into account changes in market structure and conduct, which could affect the results if neglected. We analyze separately two segments of the credit market (households and firms) and take into account two groups of institutions (those that were directly involved in mergers and those that were not). We find that mergers increased the total amount of credit granted to the corporate sector, but had negative impacts on households’ access to credit. Moreover, we find that mergers led to a widespread decrease in interest rates. |
| JEL: | G21 G34 L10 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:ptu:wpaper:w201005&r=ban |
| By: | Joao A. Bastos (CEMAPRE, School of Economics and Management (ISEG), Technical University of Lisbon) |
| Abstract: | This study evaluates the performance of feed-forward neural networks to model and forecast recovery rates of defaulted bank loans. In order to guarantee that the predictions are mapped into the unit interval, the neural networks are implemented with a logistic activation function in the output neuron. The statistical relevance of explanatory variables is assessed using the bootstrap technique. The results indicate that the variables which the neural network models use to derive their output coincide, to a great extent, with those that are significant in parametric fractional regression models. Out-of-sample estimates of prediction errors are evaluated. The results suggest that neural networks may have better predictive ability than fractional regression models, provided the number of observations is sufficiently large. |
| Keywords: | Loss given default, Recovery rate, Forecasting, Bank loan, Fractional regression, Neural network |
| JEL: | G21 G33 |
| Date: | 2010–07 |
| URL: | http://d.repec.org/n?u=RePEc:cma:wpaper:1003&r=ban |
| By: | van Empel, Gerard |
| Abstract: | Many people in the vast rural areas of Africa lack access to financial services, and most commercial banks are not interested in moving into these areas due to their low income levels, lack of scale economies, and poor infrastructure. Also, few banks actually understand the most common economic activity in rural areas: agriculture. Consequently, the absence of financial institutions in rural Africa has often enticed governments to step in, particularly with state-dominated banks focused on agriculture. Many of these initiatives have failed, however, because they were too bureaucratic, too policy oriented, too concentrated on risk to only one segment of the population, or too weak in customer focus. In addition, clients considered these government-sponsored institutions to be instruments that provided grants; hence, the banks suffered from poor loan-recovery rates. While microfinance institutions have made some inroads into rural Africa with the financial backing of international nongovernmental organizations and other sponsors, their sustainability is questionable. They tend to lack banking licenses and therefore have a very limited product range, and they cannot afford modern technology-based distribution systems. |
| Keywords: | Agricultural development -- Africa, agriculture finance, Farmers, Rabobank, rural banking, supply chain, |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:fpr:2020br:18(4)&r=ban |
| By: | Franklin Allen (Professor, University of Pennsylvania(E-mail: allenf@wharton.upenn.edu)); Elena Carletti (Professor, European University Institute(E-mail: Elena.Carletti@EUI.eu)) |
| Abstract: | The financial sector is heavily regulated in order to prevent financial crises. The recent crisis showed how ineffective this regulation and other types of government intervention were in achieving this aim. We argue that the crisis was primarily caused by housing price bubbles. These occurred because of too loose monetary policies and the easy availability of credit resulting from the build up of large foreign exchange reserves by Asian central banks. A number of regulatory reforms are suggested. It is also argued that central banks need to have more checks and balances. Finally, the international financial architecture needs to be changed so that Asian countries do not feel the need to accumulate large foreign exchange reserves. |
| Keywords: | Bubbles, Monetary Policy, Global Imbalances |
| JEL: | G12 G21 G28 |
| Date: | 2010–07 |
| URL: | http://d.repec.org/n?u=RePEc:ime:imedps:10-e-18&r=ban |
| By: | Ethan Cohen-Cole (Robert H Smith School of Business, 4420 Van Munching Hall, University of Maryland, College Park, MD 20742, USA.); Jonathan Morse (Federal Reserve Bank of Boston, 600 Atlantic Avenue, Boston, MA, USA.) |
| Abstract: | From the onset of the 2007-2009 crisis, the Federal Reserve and the European Central Bank have aggressively lowered interest rates. Both sets of changes are at odds with an anti-inflationary stance of monetary policy; indeed, as the crisis began in August 2007 inflation expectations were high and rising, particularly in the United States. We have two additions to the literature. One, we present a model economy with a leveraged and regulated financial sector. Two, we find optimal Taylor rules for our economy that are consistent with a strong pro-inflationary reaction during financial crisis while maintaining a standard output-inflation mandate. We have three interpretations of our results. One, because the Federal Reserve has partial control over bank regulation it can exercise regulatory lenience. Two, the Fed’s stronger output orientation means that it will potentially respond more quickly when faced with constrained banks. Three, our results support procyclical capital regulation. JEL Classification: E52, E58, G18, G28. |
| Keywords: | monetary policy, capital regulation, crisis. |
| Date: | 2010–07 |
| URL: | http://d.repec.org/n?u=RePEc:ecb:ecbwps:20101222&r=ban |
| By: | Naohisa Hirakata (Deputy Director and Economist, Research and Statistics Department, Bank of Japan (E-mail: naohisa.hirakata@boj.or.jp)); Nao Sudo (Deputy Director and Economist, Institute for Monetary and Economic Studies, Bank of Japan (E-mail: nao.sudou@boj.or.jp)); Kozo Ueda (Director and Senior Economist, Institute for Monetary and Economic Studies, Bank of Japan (E-mail: kouzou.ueda boj.or.jp)) |
| Abstract: | Recent financial turmoil and existing empirical evidence suggest that adverse shocks to the financial intermediary (FI) sector cause substantial economic downturns. The quantitative significance of these shocks to the U.S. business cycle, however, has not received much attention up to now. To determine the importance of these shocks, we estimate a sticky-price dynamic stochastic general equilibrium model with what we describe as chained credit contracts. In this model, credit- constrained FIs intermediate funds from investors to credit-constrained entrepreneurs through two types of credit contract. Using Bayesian estimation, we extract the shocks to the FIs' net worth. The shocks are cyclical, typically negative during a recession, such as the one that began in 2007. Their effects are persistent, lowering economic activity for several quarters after the recessionary trough. According to the variance decomposition, shocks to the FI sector are a main source of the spread variations, explaining 39% of the FIs' borrowing spread and 23% of the entrepreneurial borrowing spread. At the same time, these shocks play an important but not dominant role for investment, accounting for 15% of its variations. |
| Keywords: | Monetary Policy, Financial Accelerators, Financial Intermediaries, Chained Credit Contracts |
| JEL: | E31 E44 E52 |
| Date: | 2010–07 |
| URL: | http://d.repec.org/n?u=RePEc:ime:imedps:10-e-13&r=ban |
| By: | J L Ford; Zahid Mohammad |
| Abstract: | This paper employs semi-annual observations from 1964s1 to 2005s1 to evaluate the monetary transmission mechanism that has operated in Pakistan. It does so by using the familiar VAR approach and by analysing impulse responses and variance decompositions to banking sector and macroeconomic variables consequent upon innovations to the chosen indicator of monetary conditions. Those analyses demonstrate that the bank lending channel operates in Pakistan. The resultant VEC models embody cointegration; and this is used to identify long-run relationships between the variables. Observations are extended to 2008s2 to provide some indication of the out-of-sample quality of information provided by those relationships. Investigations using the Kalman filter provide evidence that, crucially, the innovations to the monetary indicators are influenced by sudden adjustments of monetary policy instruments. |
| Keywords: | monetary transmission mechanisms, disaggregation of bank loans, VARs, VECs, identified cointegration vectors, innovations to SBP's monetary instruments and monetary indicator innovations |
| JEL: | E52 E58 |
| Date: | 2010–07 |
| URL: | http://d.repec.org/n?u=RePEc:bir:birmec:10-21&r=ban |
| By: | Liu, Yanyan; Deininger, Klaus |
| Abstract: | Since the establishment of the Grameen Bank in Bangladesh in 1976, microfinance has boomed. As of December 31, 2007, 3,552 microcredit institutions had reached 154 million clients worldwide, about 106.6 million of whom were among the poorest when they took their first loan. Such expansion can be at least partly attributed to the widely adopted practice of group lending in microfinance programs. In contrast to individual lending, group lending (or joint liability) grants a loan to a group of borrowers, and the whole group is liable for the debt of any individual member in the group. This practice allows microfinance programs to rely mainly on accountability and mutual trust among group members rather than financial collateral to insure against default. Given that the poor often lack appropriate financial collateral, group lending programs offer a feasible way of extending credit to poor people who are usually kept out of traditional banking systems. There is considerable debate about whether such groups can be sustainable, achieving sound repayment performance while serving poor borrowers. The factors affecting repayment performance are thus of great policy relevance. This brief examines whether and how much repayment is affected by three factors: the source of the loan, groups’ provision of public goods in the form of insurance substitutes, and the monitoring and repayment rules of the federations of groups. The data come from more than 2,000 self-help groups (SHGs), federated in 299 village organizations in the Indian state of Andhra Pradesh. The SHGs under study were supported by a large World Bank program called the Indira Kranti Patham (IKP) program, with a cost of US$260 million. The program has been replicated in other states in India and may be replicated in other countries. A better understanding of factors influencing repayment will therefore help improve the performance and advance of the program. |
| Keywords: | Indira Kranti Patham (IKP) program, Micro-credit programs., self-help groups (SHGs), |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:fpr:2020br:18(7)&r=ban |
| By: | Ravallion, Martin; Wagstaff, Adam |
| Abstract: | The World Bank has produced a huge volume of books and papers on development -- 20,000 publications spanning decades, but growing appreciably since 1990. This paper finds evidence that many of these publications have influenced development thinking, as indicated by the citations found using Google Scholar and in bibliographic data bases. However, the authors also find that a non-negligible share of the Bank's publications have received no citations, suggesting that they have had little scholarly influence, though they may well have had influence on non-academic audiences. Individually-authored journal articles have been the main channel for scholarly influence. The volume of the Bank's research output on development is greater than that of any of the comparator institutions identified, including other international agencies and the top universities in economics. The bibliometric indicators of the quality and influence of the Bank's portfolio of scholarly publications are on a par with, or better than, most of the top universities. |
| Keywords: | Banks&Banking Reform,Information Security&Privacy,Tertiary Education,Corporate Law,Access to Finance |
| Date: | 2010–07–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:5374&r=ban |
| By: | Li L. Ong; Martin Cihák |
| Abstract: | The global financial crisis revealed weaknesses in the stress testing exercises performed on financial institutions and systems around the world. These failures were most evident in the area of liquidity risk, where now-obvious vulnerabilities were left largely undetected, with stress tests having largely focused on solvency risk. This paper uses publicly available data from a now-defunct bank in Iceland, where liquidity shocks were immense, to demonstrate how a combination of stress tests of the various risks would have provided a clearer picture of existing vulnerablities. We show that, ultimately, stress test models do not necessarily need to be complex or overly sophisticated. Basic stress tests, using appropriate assumptions and shocks, could reveal key areas of risk to inform contingency planning. The liquidity stress test templates used in this paper are included. |
| Date: | 2010–07–07 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:10/156&r=ban |
| By: | Christoph Ohler (School of Law, Friedrich-Schiller-University Jena) |
| Abstract: | - |
| Keywords: | - |
| JEL: | F33 K33 |
| Date: | 2010–06–14 |
| URL: | http://d.repec.org/n?u=RePEc:hlj:hljwrp:04-2009&r=ban |
| By: | Emine Boz; Enrique G. Mendoza |
| Abstract: | Uncertainty about the riskiness of new financial products was an important factor behind the U.S. credit crisis. We show that a boom-bust cycle in debt, asset prices and consumption characterizes the equilibrium dynamics of a model with a collateral constraint in which agents learn "by observation" the true riskiness of a new financial environment. Early realizations of states with high ability to leverage assets into debt turn agents optimistic about the persistence of a high-leverage regime. The model accounts for 69 percent of the household debt buildup and 53 percent of the rise in housing prices during 1997-2006, predicting a collapse in 2007. |
| Date: | 2010–07–14 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:10/164&r=ban |
| By: | Mark Miller |
| Abstract: | Imagine you are a bank manager and you have to decide to whom you will lend money. One prospect is an industrial company and the other is a farmer. As someone who wants the largest possible profits, you will look at each person’s credit worthiness and the interest rate and decide based primarily on these two factors. If the farmer is a riskier borrower but is willing to pay a high enough rate of interest to compensate for this risk, then you may very well decide to lend to the farmer. The same is true for the industrialist. In this stylised example, whoever values the loan more will receive it so the borrower is better off because he is willing to pay more later for money now, and the lender is better off because he is earning the highest possible profit. And the person who did not receive the loan is free to go to a competing banker and borrow money from there or to forgo the loan altogether. [Working Paper No. 0030] |
| Keywords: | bank manager, industrial company, credit worthiness, loan, competing banker |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:ess:wpaper:id:2673&r=ban |
| By: | Christian Fahrholz (School of Economics and Business Administration, Friedrich-Schiller-University Jena); Roman Goldbach |
| Abstract: | - |
| Keywords: | - |
| JEL: | E62 G12 G14 H30 H61 |
| Date: | 2010–06–14 |
| URL: | http://d.repec.org/n?u=RePEc:hlj:hljwrp:10-2010&r=ban |
| By: | Ritchie, Anne |
| Abstract: | Community-based financial organizations (CBFOs) are user-owned and -operated groups that provide mainly saving and lending services but may also offer other financial services such as insurance. These independent organizations are based in local communities, with local governance and management. CBFOs range in size. They can take the form of informal and unregistered groups of five to seven people, usually women, who meet weekly to save small amounts of money that they then lend to each other and possibly to other members of the community. They also include larger, slightly more formal groups of up to 40 people who have written by-laws, and they include small financial cooperatives. CBFOs flourish among people who have poor access to banks and nonbank financial institutions such as microfinance institutions (MFIs). |
| Keywords: | Community-based financial organizations (CBFOs), Insurance, lending, saving, |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:fpr:2020br:18(3)&r=ban |
| By: | Gilles Dufrenot; Valerie Mignon; Anne Peguin-Feissolle |
| Abstract: | The aim of this article is to answer the following question: can the considerable rise in the volatility of the LAC stock markets in the aftermath of the 2007/2008 crisis be explained by the worsening financial environment in the US markets? To this end, we rely on a timevarying transition probability Markov-switching model, in which “crisis” and “non-crisis” periods are identified endogenously. Using daily data from January 2004 to April 2009, our findings do not validate the “financial decoupling” hypothesis since we show that the financial stress in the US markets is transmitted to the LAC’s stock market volatility, especially in Mexico. |
| Keywords: | Stock markets; volatility; financial stress; regime-switching; Markovswitching model |
| JEL: | C13 C22 G15 |
| Date: | 2010–07 |
| URL: | http://d.repec.org/n?u=RePEc:cii:cepidt:2010-11&r=ban |
| By: | Davide Furceri (OECD and University of Palermo); Aleksandra Zdzienicka (Université de Lyon, Lyon, F-69003, France; CNRS, GATE Lyon St Etienne, UMR 5824, 93, chemin des Mouilles, Ecully, F-69130, France; ENS-LSH, Lyon, France) |
| Abstract: | The aim of this work is to assess the short and medium term impact of banking crises on developing economies. Using an unbalanced panel of 159 countries from 1970 to 2006, the paper shows that banking crises produce significant output losses, both in the short and in the medium term. The effect depends on structural and policy variables. Output losses are larger for relatively more wealthy economies, characterized by a higher level of financial deepening and larger current account imbalances. Flexible exchange rates, fiscal and monetary policy have been found to be efficient tools to attenuate the effect of the crises. Among banking intervention policies, liquidity support resulted to be the one associated with lower output losses. |
| Keywords: | Output Losses, Financial Crisis |
| JEL: | G1 E6 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:gat:wpaper:1014&r=ban |