|
on Corporate Finance |
| By: | Rashid, Muhammad Mustafa |
| Abstract: | Since the late 18th century and the signing of the National Bank Act, the creation of the Federal Reserve System in 1913, the collapse of the Bretton Woods system in 1971 and the Asian crises in 1997-98, financial Institutions had already become one of the most heavily regulated of all business in the modern business world. Increase in Regulation occurred after the 2000-2006 subprime crises and the 2007-2009 crises with the creation of the Dodd-Frank Wall Street Reform and Consumer Protection passed in July 2010 emphasizing financial stability although most of the structure was based on the regulatory solutions of the 1930’s and the New Deal. The euro crises have further raised questions about financial architecture in the euro zone. Furthermore, the increase in innovation, the shadow banking system and recent political pressure towards deregulation, it has proved hard for the financial regulations to keep up and hence even though at the present moment point time the system seems to be holding up, the long-term direction of the financial regulatory system is uncertain. |
| Keywords: | Financial Economics, Financial Markets, Financial Institutions and Services, Corporate Finance and Governance, Government Policy and Regulation. |
| JEL: | G18 G28 G38 |
| Date: | 2019–04–19 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:93447&r=all |
| By: | Acharya, Viral V.; Imbierowicz, Björn; Steffen, Sascha; Teichmann, Daniel |
| Abstract: | We investigate the transmission of central bank liquidity to bank deposits and loan spreads in Europe over the January 2006 to June 2010 period. We find evidence consistent with an impaired transmission channel due to bank risk. Central bank liquidity does not translate into lower loan spreads for high-risk banks, even as it lowers deposit rates for both high-risk and low-risk banks. This adversely affects the balance sheets of high-risk bank borrowers, leading to lower payouts, lower capital expenditures, and lower employment. Overall, our results suggest that banks' capital constraints at the time of an easing of monetary policy pose a challenge to the effectiveness of the bank lending channel and the effectiveness of the central bank as a lender of last resort. |
| Keywords: | Central bank liquidity,Monetary policy transmission,Corporate deposits,Financial crisis,Lender of last resort,Banking crisis,Loans,Real effects |
| JEL: | E43 E58 G01 G21 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:cfswop:620&r=all |