Catalogue Search | MBRL
Are you sure you want to remove the book from the shelf?
{{itemTitle}}
813
result(s) for
"Banks and banking Insurance business Europe."
Sort by:
Deposit Insurance, Banking Crises, and Market Discipline: Evidence from a Natural Experiment on Deposit Flows and Rates
Using evidence from Russia, we carry out what we believe to be the literature's cleanest test of the direct impact of deposit insurance on market discipline and study the combined effect of a banking crisis and deposit insurance on market discipline. We employ a difference-in-difference estimator to isolate the change in the behavior of a newly insured group (i.e., households) relative to an uninsured \"control\" group (i.e., firms). The sensitivity of households to bank capitalization diminishes markedly after the introduction of deposit insurance. The traditional wake-up call effect of a crisis is muted by this numbing effect of deposit insurance.
Journal Article
Trade Credit: Suppliers as Debt Collectors and Insurance Providers
This article examines how in a context of limited enforceability of contracts suppliers may have a comparative advantage over banks in lending to customers because they are able to stop the supply of intermediate goods. Suppliers may act also as liquidity providers, insuring against liquidity shocks that could endanger the survival of their customer relationships. The relatively high implicit interest rates of trade credit are the result of insurance and default premiums that are amplified whenever suppliers face a relatively high cost of funds. I explore these effects empirically for a panel of UK firms.
Journal Article
Bank lending in the Great Recession and in the Great Depression
The effects of the Great Depression (GD, 1929–1936) on the Italian banking system were worse than those of the Great Recession (GR, 2007–2014), in terms of loan and deposit contraction and of bank failures. When the GD hit the Italian economy in 1929–1930, regulatory restrictions on bank activity were mild, whereas a stricter regulatory framework was in force at the beginning of the GR and notably included bank supervision, capital requirements and deposit insurance. We test the effectiveness of the modern institutional setting by comparing lending policies in the two crises using micro data on bank balance sheets. We find that in the GR banks with higher pre-crisis capital ratios were able to expand lending more than undercapitalized banks, whereas in the GD there were no differences between high and low-capitalized banks.
Journal Article
Bank Capital, Liquidity Creation and Deposit Insurance
This paper examines how the introduction of deposit insurance influences the relationship between bank capital and liquidity creation. As discussed by Berger and Bouwman (Rev Financ Stud 22:3779–3837,
2009
), there are two competing hypotheses on this relationship which can be influenced by the presence of deposit insurance. The introduction of a deposit insurance scheme in an emerging market, Russia, provides a natural experiment to empirically investigate this issue. We use the difference-in-difference approach on a large dataset of all Russian banks. Our findings suggest that the introduction of the deposit insurance scheme has different effects on the relationship between capital and bank liquidity creation across different types of banks. It is those banks characterized by relatively high household deposit ratios that are most affected by the introduction of deposit insurance program. For these banks, deposit insurance reduces the impact of capital on liquidity creation. These findings have important policy implications as they suggest that deposit insurance and capital requirements should not be considered separately by bank regulators.
Journal Article
Do Depositors Discipline Banks and Did Government Actions During the Recent Crisis Reduce this Discipline? An International Perspective
The recent financial crisis highlights the importance of both regulatory and market discipline. Government reactions to the crisis included expanding deposit insurance coverage and rescuing troubled institutions, including some institutions that might not otherwise be considered too important to fail. These actions may have the unintended consequence of a reduction in market discipline that might otherwise penalize banks for risk-taking behavior. Alternatively, market discipline may have increased during the crisis due to heightened awareness of the risks of bank failures. To address these issues, we first test for the presence of depositor discipline effects in the period leading up to the financial crisis in both the US and the EU. Second, we test whether depositor discipline decreased or increased during the crisis. We find significant depositor discipline prior to the crisis in both the US and EU, but this varies between the US and the EU as well as with banking organization size and with listed versus unlisted status. We also find that depositor discipline mostly decreased during the crisis, except for the case of small US banks.
Journal Article
Regulations and Productivity Growth in Banking: Evidence from Transition Economies
This paper examines the relationship between the regulatory and supervision framework, and the productivity of banks in 22 countries over the period 1999—2009. We follow a semiparametric two-step approach that combines Malmquist index estimates with bootstrap regressions. The results indicate that regulations and incentives that promote private monitoring (PMON) have a positive impact on productivity. Restrictions on banks' activities relating to their involvement in securities, insurance, real estate, and ownership of nonfinancial firms also have a positive impact. Regulations relating to the first and second pillars of Basel II, namely, capital requirements (CAPR) and official supervisory power (SPR) do not have, in general, a statistically significant impact on productivity over the study period although they appear to gain in importance following the onset of the financial crisis in 2007. The latter finding indicates that stringent capital and supervisory standards have positive productivity effects when financial pressures peak. Our results are robust when controlling for various country-specific features and alternative estimation approaches.
Journal Article
The Distortive Effects of Too Big To Fail
We study the impact of too-big-to-fail (TBTF) guarantees on the market for retail deposits. Exploiting information about all personal deposit accounts in Denmark and salient changes to the deposit insurance limit, we provide evidence that systemically important banks successfully retain and attract uninsured deposits in a crisis at the expense of other banks even as they differentially lower their interest rates. The funding shock suffered by nonsystemic banks causes a decrease in their lending. The results point to the distortive effects of TBTF guarantees in the market for retail deposits.
Journal Article
The Hunt for Duration: Not Waving but Drowning?
Long-term interest rates in Europe fell sharply in 2014 to historically low levels. This development is often attributed to yield-chasing in anticipation of quantitative easing by the European Central Bank. We examine how portfolio adjustments by long-term investors aimed at containing duration mismatches may have acted as an amplification mechanism in this process. Declining long-term interest rates tend to widen the negative duration gap between the assets and liabilities of insurers and pension funds, and any attempted rebalancing by increasing asset duration results in further downward pressure on interest rates. Evidence from the German insurance sector is consistent with such an amplification mechanism.
Journal Article
Systemic Risk in Financial Markets: How Systemically Important Are Insurers?
This study investigates how insurers contribute to systemic risk in the global financial system. In a modeling framework embracing publicly traded and nonpublic firms, the financial system is represented by 201 major banks and insurers over the period from 2004 through 2014. In the aggregate, the insurance sector contributes relatively little to systemic losses; during the financial crisis and the European sovereign debt crisis, its risk share averaged 9 percent. Individually, however, several multi-line and life insurers appear to be as systemically risky as the riskiest banks. Our results, therefore, affirm that some insurers are systemically important and indicate that insurers' level of systemic risk varies by line of business. We discuss several important implications of our results for managing systemic risk in insurance, arguing for a combination of entity- and activity-based regulation.
Journal Article