New Economics Papers
on Banking
Issue of 2014‒03‒30
24 papers chosen by
Christian Calmès, Université du Québec en Outaouais

  1. Lending Standards and Countercyclical Capital Requirements under Imperfect Information By Gete, Pedro; Tiernan, Natalie
  2. Loan Default Prediction in Ukrainian Retail Banking By Goriunov Dmytro; Venzhyk Katerina
  3. Why Do Banks Practice Regulatory Arbitrage? Evidence from Usage of Trust Preferred Securities By Nicole M. Boyson; Rüdiger Fahlenbrach; René M. Stulz
  4. Liquidity coinsurance and bank capital By Castiglionesi, Fabio; Feriozzi, Fabio; Lóránth, Gyöngyi; Loriana Pelizzon
  5. Wealth shocks, credit-supply shocks, and asset allocation: Evidence from household and firm portfolios By Kick, Thomas; Ruprecht, Benedikt; Onali, Enrico; Schaeck, Klaus
  6. Heterogeneous bank lending responses to monetary policy: new evidence from a real-time identification By Bluedorn, John C.; Bowdler, Christopher; Koch, Christoffer
  7. Systemic risk in dynamical networks with stochastic failure criterion By B. Podobnik; D. Horvatic; M. Bertella; L. Feng; X. Huang; B. Li
  8. Endogenous Firms Dynamics and Banking By Carla La Croce; Lorenza Rossi
  9. The economics of debt collection: enforcement of consumer credit contracts By Fedaseyeu, Viktar; Hunt, Robert M.
  10. Discounting Cashflows from Illiquid Assets on Bank Balance Sheets By Nauta, Bert-Jan
  11. Financial market regulation in Germany under the special focus of capital requirements of financial institutions By Detzer, Daniel
  12. The Vulnerability of Minority Homeowners in the Housing Boom and Bust By Patrick Bayer; Fernando Ferreira; Stephen L. Ross
  13. Is Bank Debt Special for the Transmission of Monetary Policy? Evidence from the Stock Market By Ander Perez; Ali Ozdagli; Filippo Ippolito
  14. Switching Cost and Deposit Demand in China By Chun-Yu Ho
  15. A model of mortgage default By Campbell, John Y.; Cocco, João F.
  16. Foreclosure delay and consumer credit performance By Calem, Paul S.; Jagtiani, Julapa; Lang, William W.
  17. Real Effects of Investment Banking Relationships: Evidence from the Financial Crisis By Oesch, David; Schuette, Dustin; Walter, Ingo
  18. Monetary and macroprudential policy in an estimated DSGE model of the Euro Area By Quint, Dominic; Rabanal, Pau
  19. Cash Providers: Asset Dissemination over Intermediation Chains By Jean-Edouard Colliard; Gabrielle Demange
  20. How Strongly are Business Cycles and Financial Cycles Linked in the G7 Countries? By Nikolaos Antonakakis; Max Breitenlechner; Johann Scharler
  21. Anatomy of a Credit Crunch: From Capital to Labor Markets By Francisco J. Buera; Roberto Fattal-Jaef; Yongseok Shin
  22. Dynamic effects of microcredit in Bangladesh By Khandker, Shahidur R.; Samad, Hussain A.
  23. Choosing the type of income-contingent loan: risk-sharing versus risk-pooling By Elena Del Rey; María Racionero
  24. Le reporting sur la diversite du genre dans les rapports annuels des banques francaises: quels changements? By Amel Ben Rhouma; Marie-José Scotto

  1. By: Gete, Pedro; Tiernan, Natalie
    Abstract: We propose a quantitative model of lending standards with two reasons for inefficient credit: lenders' moral hazard from deposit insurance or government guarantees, and imperfect information about the persistence of asset price growth, which generates incorrect but rational beliefs in the lenders. We calibrate the model to match recent credit boom-bust episodes. Then we study which patterns of real estate price growth and banks' beliefs could serve as early warning indicators of a crisis. Finally, we propose a Value-at-Risk (VaR) rule to implement the capital requirements. The VaR framework ensures that the probability of banks not having enough equity to cover their losses is maintained at a certain level. Capital requirements should be state-contingent and lean against lenders' beliefs by tightening after periods of asset price growth. However, the relationship between asset price growth and financial risk is not monotone and this should be integrated in the setting of the capital requirements and early warning indicators.
    Keywords: Lending Standards, Capital Requirements, Leverage Rules, VaR, Basel III
    JEL: E44 G2 G21 G28
    Date: 2014–03
  2. By: Goriunov Dmytro; Venzhyk Katerina
    Abstract: Using a large proprietary dataset provided by the tenth largest Ukrainian banking institution, we posit reasons for loan defaults within two major groups of retail borrowers; car loans and mortgages. Two model types were used, namely logistic regression and neural networks. The results of our estimations suggest that a) data currently collected by banks are sufficient to predict defaults, but bankers should collect more information, and that b) the neural networks model slightly outperforms the logit model in predictive power.
    JEL: G21 G32 G33
    Date: 2013–05–23
  3. By: Nicole M. Boyson; Rüdiger Fahlenbrach; René M. Stulz
    Abstract: We propose a theory of regulatory arbitrage by banks and test it using trust preferred securities (TPS) issuance. From 1996 to 2007, U.S. banks in the aggregate increased their regulatory capital through issuance of TPS while their net issuance of common stock was negative due to repurchases. We assume that, in the absence of capital requirements, a bank has an optimal capital structure that depends on its business model. Capital requirements can impose constraints on bank decisions. If a bank’s optimal capital structure also meets regulatory capital requirements with a sufficient buffer, the bank is unconstrained by these requirements. We expect that unconstrained banks will not issue TPS, that constrained banks will issue TPS and engage in other forms of regulatory arbitrage, and that banks with TPS will be riskier than other banks with the same amount of regulatory capital, and therefore, more adversely affected by the credit crisis. Our empirical evidence supports these predictions.
    JEL: G01 G21
    Date: 2014–03
  4. By: Castiglionesi, Fabio; Feriozzi, Fabio; Lóránth, Gyöngyi; Loriana Pelizzon
    Abstract: Banks can deal with their liquidity risk by holding liquid assets (self-insurance), by participating in interbank markets (coinsurance), or by using flexible financing instruments, such as bank capital (risk-sharing). We use a simple model to show that undiversi fiable liquidity risk, i.e. the liquidity risk that banks are unable to coinsure on interbank markets, represents an important risk factor affecting their capital structures. Banks facing higher undiversi fiable liquidity risk hold more capital. We posit that empirically banks that are more exposed to undiversifi able liquidity risk are less active on interbank markets. Therefore, we test for the existence of a negative relationship between bank capital and interbank market activity and find support in a large sample of U.S. commercial banks. --
    Keywords: Bank Capital,Interbank Markets,Liquidity Coinsurance
    JEL: G21
    Date: 2014
  5. By: Kick, Thomas; Ruprecht, Benedikt; Onali, Enrico; Schaeck, Klaus
    Abstract: We use a unique dataset with bank clients' security holdings for all German banks to examine how macroeconomic shocks affect asset allocation preferences of households and non-financial firms. Our analysis focuses on two alternative mechanisms which can influence portfolio choice: wealth shocks, which are represented by the sovereign debt crisis in the Eurozone, and credit-supply shocks which arise from reductions in borrowing abilities during bank distress. We document heterogeneous responses to these two types of shocks. While households with large holdings of securities from stressed Eurozone countries (Greece, Ireland, Italy, Portugal, and Spain) decrease the degree of concentration in their security portfolio as a result of the Eurozone crisis, non-financial firms with similar levels of holdings from stressed Eurozone countries do not. Credit-supply shocks at the bank level (caused by bank distress) result in lower concentration, for both households and non-financial corporations. We also show that only shocks to corporate credit bear ramifications on bank clients' portfolio concentration, while shocks in retail credit are inconsequential. Our results are robust to falsification tests, propensity score matching techniques, and instrumental variables estimation. --
    Keywords: asset allocation,sovereign debt crisis,credit-supply shocks,bank distress
    JEL: D12 D13 G11 G21
    Date: 2014
  6. By: Bluedorn, John C.; Bowdler, Christopher; Koch, Christoffer (Federal Reserve Bank of Dallas)
    Abstract: We present new evidence on how heterogeneity in banks interacts with monetary policy changes to impact bank lending, at both the bank and U.S. state levels. Using an exogenous policy measure identified from narratives on FOMC intentions and real-time economic forecasts, we find much stronger dynamic effects and greater heterogeneity in U.S. bank lending responses than that found in previous research based on realized federal funds rate changes. Our findings suggest that studies using realized monetary policy changes confound monetary policy’s effects with those of changes in expected macrofundamentals. In fact, estimates from identified monetary policy changes lead to a reversal of U.S. states’ ranking by credit’s sensitivity to policy. We also extend Romer and Romer (2004)’s identification scheme, and expand the time and balance sheet coverage of the U.S. banking sample.
    Keywords: Monetary Transmission; Lending Channel; Monetary Policy Identification; Banking
    JEL: E44 E50 G21
    Date: 2014–03–01
  7. By: B. Podobnik; D. Horvatic; M. Bertella; L. Feng; X. Huang; B. Li
    Abstract: Complex non-linear interactions between banks and assets we model by two time-dependent Erd\H{o}s Renyi network models where each node, representing bank, can invest either to a single asset (model I) or multiple assets (model II). We use dynamical network approach to evaluate the collective financial failure---systemic risk---quantified by the fraction of active nodes. The systemic risk can be calculated over any future time period, divided on sub-periods, where within each sub-period banks may contiguously fail due to links to either (i) assets or (ii) other banks, controlled by two parameters, probability of internal failure $p$ and threshold $T_h$ (``solvency'' parameter). The systemic risk non-linearly increases with $p$ and decreases with average network degree faster when all assets are equally distributed across banks than if assets are randomly distributed. The more inactive banks each bank can endure (smaller $T_h$), the smaller the systemic risk---for some $T_h$ values in {\bf I} we report a discontinuity in systemic risk. When contiguous spreading becomes stochastic (ii) controlled by probability $p_2$---a condition for the bank to be solvent (active) is stochastic---with increasing $p_2$, the systemic risk decreases with both $p$ and $T_h$. We analyse asset allocation for the U.S. banks.
    Date: 2014–03
  8. By: Carla La Croce (Department of Economics and Management, University of Pavia); Lorenza Rossi (Department of Economics and Management, University of Pavia)
    Abstract: We consider a DSGE model with flexible prices, monopolistic competitive banks and sticky interest rates, together with endogenous ?firms exit and entry decisions. We find that economies characterized by endogenous ?firms dynamics imply higher volatilities of both real and financial variables than those implied by a DSGE with monopolistic banking and a fixed number of firms, in response to both real and financial shocks. The model with endogenous exit, in line with the empirical evidence, implies: i) countercyclical exit; ii) an endogenous countercyclical bank markup and an endogenous countercyclical interest rate spread; iii) a quicker recovery in the aftermath of a financial crisis, when the macroprudential authority implements countercyclical capital requirements (Basel III). This policy is more stabilizing than Basel II as well as than an alternative Taylor rule explicitly targeting capital-to-asset ratio.
    Keywords: firms endogenous exit, bank markup, interest rate spread, macro- prudencial policies, Taylor rule.
    JEL: E32 E44 E52 E58
    Date: 2014–03
  9. By: Fedaseyeu, Viktar (Federal Reserve Bank of Philadelphia); Hunt, Robert M. (Federal Reserve Bank of Philadelphia)
    Abstract: In the U.S., third-party debt collection agencies employ more than 140,000 people and recover more than $50 billion each year, mostly from consumers. Informational, legal, and other factors suggest that original creditors should have an advantage in collecting debts owed to them. Then, why does the debt collection industry exist and why is it so large? Explanations based on economies of scale or specialization cannot address many of the observed stylized facts. The authors develop an application of common agency theory that better explains those facts. The model explains how reliance on an unconcentrated industry of third-party debt collection agencies can implement an equilibrium with more intense collections activity than creditors would implement by themselves. The authors derive empirical implications for the nature of the debt collection market and the structure of the debt collection industry. A welfare analysis shows that, under certain conditions, an equilibrium in which creditors rely on third-party debt collectors can generate more credit supply and aggregate borrower surplus than an equilibrium where lenders collect debts owed to them on their own. There are, however, situations where the opposite is true. The model also suggests a number of policy instruments that may improve the functioning of the collections market.
    Keywords: Debt collection; contract enforcement; consumer credit markets; regulation of credit markets; credit cards; bank reputation; FDCPA
    JEL: D18 G28 L24
    Date: 2014–03–01
  10. By: Nauta, Bert-Jan
    Abstract: Most of the assets on the balance sheet of typical banks are illiquid. This exposes banks to liquidity risk, which is one of the key risks for banks. Since the value of assets is determined by their risks, liquidity risk should be included in valuation. This paper develops a valuation framework for liquidity risk. An important element of the framework is the definition and derivation of an optimal admissible liquidation strategy that describes the assets a bank will liquidate in case of a liquidity stress event (LSE). The main result is that the discount rate includes a liquidity spread that is composed of three elements: 1. the probability of an LSE, 2. the severity of an LSE, and 3. the liquidation value of the asset. The framework is illustrated by application to a stylized bank balance sheet.
    Keywords: valuation; liquidity spread; discounting; liquidity risk;
    JEL: G12 G13 G21
    Date: 2013–04–01
  11. By: Detzer, Daniel
    Abstract: This paper examines capital adequacy regulation in Germany. After a short overview about financial regulation in Germany in general, the paper focuses on the most important development in the area of capital adequacy regulation from the 1930s up to the financial crisis. Two main trends are identified: a gradual softening of the eligibility criteria for regulatory equity and the increasing reliance on banks' internal risk models for the determination of risk weights. The first trend has been reversed with the regulatory reforms following the financial crisis. Internal risk models will still play a central role. The rest of the paper focuses on the problems with the use of internal risk models for regulatory purposes. The discussion includes the moral hazard problem, the technical problems with the models, the difference between economically and socially optimal capital requirements, the pro-cyclicality of the models and the problem occurring due to the existence of fundamental uncertainty. The regulatory reforms due to Basel 2.5 and Basel III and their potential to alleviate the identified problems are then examined. It is concluded that those cannot solve the most relevant problems and that currently the use of models for financial regulation is problematic. Finally, some suggestions of how the problems could be addressed are given. --
    Keywords: Banking Regulation,Financial Regulation,Capital Requirements,Capital Adequacy,Bank Capital,Basel Accord,Risk Management,Risk Models,Germany
    JEL: G18 G28 N24 N44
    Date: 2014
  12. By: Patrick Bayer (Duke University); Fernando Ferreira; Stephen L. Ross (University of Connecticut)
    Abstract: This paper examines mortgage outcomes for a large, representative sample of individual home purchases and refinances linked to credit scores in seven major US markets in the recent housing boom and bust. We find that among those with similar credit scores, black and Hispanic homeowners had much higher rates of delinquency and default in the downturn. These differences are not explained by the likelihood of receiving a subprime loan or by differential exposure to local shocks in the housing and labor market and are especially pronounced for loans originated near the peak of the boom. There is also heterogeneity within minorities: black and Hispanics that live in areas with lower employment rates and that have high debt to income ratios are the driving force of the observed racial differences in foreclosures and delinquencies. Our findings suggest that those black and Hispanic homeowners drawn into the market near the peak were especially vulnerable to adverse economic shocks and raise serious concerns about homeownership as a mechanism for reducing racial disparities in wealth.
    Keywords: Mortgage, Foreclosure, Delinquency, homeownership, minority, wealth disparities
    JEL: I38 J15 J71 R21
    Date: 2014–03
  13. By: Ander Perez (Universitat Pompeu Fabra); Ali Ozdagli (Federal Reserve Bank of Boston); Filippo Ippolito (Universitat Pompeu Fabra)
    Abstract: This paper studies the importance of bank lending to firms for the transmission of monetary policy to the real economy. We employ a novel dataset that enables us to measure bank-dependence of firms accurately, and show that the stock prices of bank-dependent firms are significantly more responsive to monetary policy shocks, controlling for firm leverage and financial constraints. We explore the channels through which this effect occurs, and find that bank dependent firms that borrow from financially distressed banks display a much stronger sensitivity to monetary policy shocks. This finding is consistent with an active bank lending channel, according to which the strength of a bank's balance sheets matters for monetary policy transmission. We also show that bank dependent firms that hedge against interest rate risk display a much lower sensitivity to monetary policy shocks, consistent with an interest rate channel that operates via the pass-through of interest rates, associated with the widespread use of floating-rates in bank loans and credit line agreements. Taken together, these results suggest that bank lending to firms plays an important role in the transmission of monetary policy, but that there is significant heterogeneity across bank dependent firms in their reaction to monetary policy shocks.
    Date: 2013
  14. By: Chun-Yu Ho (Shanghai Jiao Tong University and Hong Kong Institute for Monetary Research)
    Abstract: This paper develops and estimates a dynamic model of consumer demand for deposits in which banks provide differentiated products and product characteristics that evolve over time. Existing consumers are forward-looking and incur a fixed cost for switching banks, whereas incoming consumers are forward-looking but do not incur any cost for joining a bank. The main finding is that consumers prefer banks with more employees and branches. The switching cost is approximately 0.8% of the deposit's value, which leads the static model to bias the demand estimates. The dynamic model shows that the price elasticity over a long time horizon is substantially larger than the same elasticity over a short time horizon. Counterfactual experiments with a dynamic monopoly show that reducing the switching cost has a comparable competitive effect on bank pricing as a result of reducing the dominant position of the monopoly.
    Keywords: Banks in China, Demand Estimation, Switching Cost
    JEL: G21 L10
    Date: 2014–03
  15. By: Campbell, John Y.; Cocco, João F.
    Abstract: This paper solves a dynamic model of households' mortgage decisions incorporating labor income, house price, inflation, and interest rate risk. It uses a zero-profit condition for mortgage lenders to solve for equilibrium mortgage rates given borrower characteristics and optimal decisions. The model quantifies the effects of adjustable vs. fixed mortgage rates, loan-to-value ratios, and mortgage affordability measures on mortgage premia and default. Heterogeneity in borrowers' labor income risk is important for explaining the higher default rates on adjustable-rate mortgages during the recent US housing downturn, and the variation in mortgage premia with the level of interest rates. --
    Keywords: household finance,loan to value ratio,loan to income ratio,mortgage affordability,negative home equity,mortgage premia
    JEL: G21 E21
    Date: 2014
  16. By: Calem, Paul S. (Federal Reserve Bank of Philadelphia); Jagtiani, Julapa (Federal Reserve Bank of Philadelphia); Lang, William W. (Federal Reserve Bank of Philadelphia)
    Abstract: The deep housing market recession from 2008 through 2010 was characterized by a steep increase in the number of foreclosures. Foreclosure timelines — the length of time between initial mortgage delinquency and completion of foreclosure — also expanded significantly, averaging up to three years in some states. Most individuals undergoing foreclosure are experiencing serious financial stress. However, extended foreclosure timelines enable mortgage defaulters to live in their homes without making housing payments until the completion of the foreclosure process, thus providing a liquidity benefit. This paper tests whether the resulting liquidity was used to help cure nonmortgage credit delinquency. The authors find a significant relationship between longer foreclosure timelines and household performance on nonmortgage consumer credit during and after the foreclosure process. Their results indicate that a longer period of nonpayment of housing-related expenses results in higher cure rates on delinquent nonmortgage debts and improved household balance sheets. Foreclosure delay may have mitigated the impact of the economic downturn on credit card default. However, credit card performance may deteriorate in the future as the current foreclosure backlog is cleared and the affected households once again incur housing expenses.
    Keywords: Mortgage Default; Foreclosure; Foreclosure Delay; Credit Card Default;
    JEL: G02 G21 G28
    Date: 2014–03–09
  17. By: Oesch, David; Schuette, Dustin; Walter, Ingo
    Abstract: In this paper, we investigate the damage to real-sector investment spending and corporate financing activities triggered by the failure of three major investment banks during the 2007-09 financial crisis. We find that firms characterized by pre-crisis corporate investment banking relationships with troubled investment banks exhibit significantly lower post-crisis investment spending activity and securities issuance compared to corporations that were not affiliated with the troubled institutions. The effect varies systematically with the nature and strength of the investment banking relationship. Our results are robust with respect to various modifications and extensions of our empirical design and generally inconsistent with alternative explanations unrelated to investment banking relationships.
    Keywords: firm-underwriter relationship, investment banking, financial crisis, financial shocks, real effects, investment, financing, cash holdings
    JEL: C78 G24 G32 L14
  18. By: Quint, Dominic; Rabanal, Pau
    Abstract: In this paper, we study the optimal mix of monetary and macroprudential policies in an estimated two-country model of the euro area. The model includes real, nominal and ?nancial frictions, and hence both monetary and macroprudential policy can play a role. We ?nd that the introduction of a macroprudential rule would help in reducing macroeconomic volatility, improve welfare, and partially substitute for the lack of national monetary policies. Macroprudential policy would always increase the welfare of savers, but their e¤ects on borrowers depend on the shock that hits the economy. In particular, macroprudential policy may entail welfare costs for borrowers under technology shocks, by increasing the countercyclical behavior of lending spreads. --
    Keywords: Monetary Policy,EMU,Basel III,Financial Frictions
    JEL: C51 E44 E52
    Date: 2014
  19. By: Jean-Edouard Colliard (ECB - European Central Bank - European Central Bank); Gabrielle Demange (PSE - Paris-Jourdan Sciences Economiques - CNRS : UMR8545 - École des Hautes Études en Sciences Sociales (EHESS) - École des Ponts ParisTech (ENPC) - École normale supérieure [ENS] - Paris - Institut national de la recherche agronomique (INRA), EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris)
    Abstract: Many financial assets are disseminated to final investors via chains of over-the-counter transactions between intermediaries (investors or dealers). We build a model where an agent buying some units of the asset can offer to sell part of them to an OTC partner. Intermediation chains are endogenously formed and impact the asset's market liquidity, its issuance, and who ultimately holds the asset. An increase in the intermediaries' funding liquidity (e.g. a lower haircut on the asset) makes intermediation less necessary but also makes it cheaper to issue the asset, increasing the total volume to be distributed and the number of intermediaries and agents holding the asset. We derive implications on liquidity in OTC markets, the dissemination of ''toxic" assets and the collateral policy of central banks and CCPs.
    Keywords: OTC markets ; Collateral ; Intermediation chains ; Shadow banking
    Date: 2014–03–14
  20. By: Nikolaos Antonakakis; Max Breitenlechner; Johann Scharler
    Abstract: In this study we examine the dynamic interactions between credit growth and output growth using the spillover index approach of Diebold and Yilmaz (2012). Based on quarterly data on credit growth and GDP growth over the period 1957Q1-2012Q4 for the G7 countries we find that: i) spillovers between credit growth and GDP growth evolve rather heterogeneously over time and across countries, and increase during extreme economic events. ii) Spillovers between credit growth and GDP growth are of bidirectional nature, indicating bidirectional causation between the financial and real sectors. iii) In the period shorty before and on the onset of the global financial crisis, the link between credit growth and GDP growth becomes more pronounced. In particular, the financial sector plays a dominant role during the early stages of the crisis, while the real sector quickly takes over as the dominant source of spillovers. iv) Interestingly, credit growth in the US is the dominant transmitter of shocks internationally, and especially to other countries' real sectors in the run up period to (and during) the global financial crisis. Overall, our results suggest feedback effects between the financial and the real sectors that create rippling effects within and between the G7 countries during the global financial crisis.
    Keywords: Business cycles, Financial cycles, Spillovers, Crisis, Recession
    JEL: C32 E32 E44 E51 F42
    Date: 2014–03
  21. By: Francisco J. Buera; Roberto Fattal-Jaef; Yongseok Shin
    Abstract: Why are financial crises associated with a sustained rise in unemployment? We develop a tractable model with frictions in both credit and labor markets to study the aggregate and micro-level implications of a credit crunch--i.e., a tightening of collateral constraints. When we simulate a credit crunch calibrated to match the observed decline in the ratio of debt to non-financial assets of the United States business sector following the 2007-8 crisis, our model generates a sharp decline in output--explained by a drop in aggregate total factor productivity and investment--and a protracted increase in unemployment. We then explore the micro-level impact by tracking the employment dynamics for firms of different sizes and ages. The credit crunch causes a much larger reduction in the net employment growth rate of small, young establishments relative to that of large, old producers, consistent with the recent empirical findings in the literature.
    JEL: E24 E44 L25
    Date: 2014–03
  22. By: Khandker, Shahidur R.; Samad, Hussain A.
    Abstract: This paper uses long panel survey data spanning over 20 years to examine the dynamics of microcredit programs in Bangladesh. With the phenomenal growth of microfinance institutions representing 30 million members with over $2 billion of annual disbursement over the past two decades, it is important to understand the dynamics of microcredit expansion and its induced impact on household welfare. A dynamic panel model is used to address a number of issues, such as whether credit effects are declining over time, whether market saturation and village diseconomies are taking place, and whether multiple program membership, which is rising as a consequence of microcredit expansion, is harming or benefiting the borrowers. The paper's results confirm that microcredit programs have continued to benefit the poor by raising household welfare. The beneficial effects have also remained higher for female than male borrowers. There are diseconomies of scale caused by higher levels of village-level borrowing, especially for male members. Multiple program membership is also growing with competition from microfinance institutions, but this has rather helped raise assets and net worth more than it has contributed to indebtedness.
    Keywords: Banks&Banking Reform,Labor Policies,Economic Theory&Research,Debt Markets,Science Education
    Date: 2014–03–01
  23. By: Elena Del Rey (Universitat de Girona); María Racionero (Australian National University)
    Abstract: This paper analyses the choice between risk-sharing and risk-pooling income-contingent loans for higher education of risk-averse individuals who differ in their ability to benefit from education and inherited wealth. The paper identifies the possible outcomes of a majority vote between the two income-contingent schemes and provides several examples where the risk-pooling income-contingent loan is preferred. The paper then discusses the implications on participation and voting outcomes if successful graduates are mobile and provides examples where the riskpooling income-contingent loan remains being preferred. Risk-pooling schemes can however be prone to adverse selection problems, particularly if students are mobile. The paper explores the implications of allowing students to opt out of the riskpooling income-contingent loan for a pure loan. It shows that risk-pooling income-contingent loans can be sustained even when some students opt out.
    Keywords: Voting, higher education, income-contingent loans, risk, mobility
    JEL: H52 I22 D72
    Date: 2014
  24. By: Amel Ben Rhouma; Marie-José Scotto
    Abstract: The aim of this paper is to investigate the reporting of the information concerning a specific dimension of diversity: gender and more precisely employment of women in the French’ banks corporate annual documents of the between 1999 and 2009. Although we concentrate on a single sector and banks of equivalent sizes, our findings show different reporting models. We also observe that the word “women” was not used in the reporting before the enactment of the French NRE law of 2001. The rise of the women employment indicators is strongly linked with diversity charts and labels. The neo-institutional theory can be used as an explanatory framework of women employment reporting.
    Keywords: diversity, gender, CSR reporting, equality, bank
    Date: 2014–02–25

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