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Author: Michael R. Reichenecker
Publisher:
ISBN:
Category :
Languages : en
Pages : 129
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Book Description
Author: Michael R. Reichenecker
Publisher:
ISBN:
Category :
Languages : en
Pages : 129
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Book Description
Author: Congyu Liu
Publisher:
ISBN:
Category : Banks and banking
Languages : en
Pages : 149
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Book Description
This dissertation includes three chapters. The first chapter studies the impact of compensation on the types of risk taken by bank CEOs according to the time horizon when losses are realized. Bonus is recognized to encourage executives to boost short-term profits while equity compensation motivates long term growth. I use Guidance on Sound Incentive Compensation Policies ("the Guidance"), part of the Dodd-Frank Act, as an exogenous shock to the compensation structure of executives in banks with over $1 billion total assets. The Guidance requires banks to make deferred payment and risk adjusted awards. Using banks with less than $1billion in assets as control, I find that the treated banks pay executives with higher percentage in the stocks and engage in activities with less short-term risk and less down-side long-term risk. This paper empirically documents the effectiveness of the Guidance on the bank CEOs compensation and show that the compensation structure alters the types of risk that CEOs take. This second chapter documents the cross hedging of interest rate risk within bank holding companies (BHCs): Subsidiaries capable of risk management manage interest rate risk for themselves and for other banks in the same BHC. Bank mergers are used as exogenous shocks to address endogeneity concerns. Cross hedging increases with the complexity of BHCs, uses funds from the external capital market, and reduces exposure to interest rate risk. The paper contributes to the internal capital market literature by documenting risk management redistribution in BHCs. The third chapter examines the relation between deposit market power and several interest rate risk management tools, including interest rate derivatives hedging, wholesale funding management, and liquid asset management. Drechsler et al. (2017) document that banks can transmit monetary policy without interest rate risk because of their deposit market power. This paper hypothesizes that other risk management tools can be substitutions for market power. It finds that banks with larger market power have lower derivatives hedging level. They respond to a Fed fund rate increase with higher wholesale funding and liquid asset holding to replace the deposit outflow. This paper contributes to the banking risk management literature by documenting the mutual relation among risk management tools.
Author: Lisa E. Williams
Publisher:
ISBN:
Category : Banks and banking
Languages : en
Pages : 153
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Book Description
Risks in the banking industry occasionally come into the public spotlight due to events such as the recent financial crisis. This study examines risk characteristics of bank holding companies (BHCs) based upon their use of interest rate derivatives. Prior research examining interest rate derivatives in BHCs is based upon data prior to the required segregation indicating whether or not derivatives are used for trading. This research uses segregated derivative data. BHCs are divided into those using no derivatives, those using non-trading derivatives, and those using both trading and non-trading derivatives. Differences in both interest rate sensitivity and overall firm risk between BHCs of differing derivative types are analyzed. Evidence indicates BHCs using non-trading derivatives have higher interest rate sensitivity than those using no derivatives. In addition, BHCs using both non-trading and trading derivatives have greater interest sensitivity than BHCs using only non-trading derivatives. BHCs using derivatives regardless of type do not exhibit greater overall volatility than BHCs using no derivatives. Selective hedging, partially but not fully hedging a risk exposure, is also examined. BHCs successfully trading in derivatives must invest in personnel with the requisite expertise. It is plausible these BHCs would leverage this expertise to selectively hedge in their non-trading portfolio. Whether or not these BHCs selectively hedge is inconclusive. However, in most instances, derivative positions in the non-trading portfolio of these BHCs are advantageous. Whether operational hedging is a substitute for or a complement to financial hedging is also explored. Prior research limits operational hedging in BHCs to merger and acquisition activity. This research examines operational activities involving geographic diversification, loan diversification, and non-interest income diversification. Evidence supports these operational activities act as hedges and are substitutes for financial hedging. Of the three operational hedges examined, only geographic diversification is associated with decreased BHC interest rate sensitivity. This dissertation contributes to existing literature by fostering a clearer understanding of BHC risk management strategies. Given the crucial role the health of the banking industry plays in the overall health of the economy, understanding how banks manage various risks is beneficial to regulators and investors.
Author: Board of Governors of the Federal Reserve System
Publisher:
ISBN: 9780894991967
Category : Banks and Banking
Languages : en
Pages : 0
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Book Description
Provides an in-depth overview of the Federal Reserve System, including information about monetary policy and the economy, the Federal Reserve in the international sphere, supervision and regulation, consumer and community affairs and services offered by Reserve Banks. Contains several appendixes, including a brief explanation of Federal Reserve regulations, a glossary of terms, and a list of additional publications.
Author: Longjie Lu
Publisher: Cambridge University Press
ISBN: 1316513963
Category : Business & Economics
Languages : en
Pages : 395
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Book Description
A comparative study providing insights into the regulations and practices of bankers' remuneration in the UK and China.
Author: Financial Crisis Inquiry Commission
Publisher: Cosimo, Inc.
ISBN: 1616405414
Category : Political Science
Languages : en
Pages : 692
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Book Description
The Financial Crisis Inquiry Report, published by the U.S. Government and the Financial Crisis Inquiry Commission in early 2011, is the official government report on the United States financial collapse and the review of major financial institutions that bankrupted and failed, or would have without help from the government. The commission and the report were implemented after Congress passed an act in 2009 to review and prevent fraudulent activity. The report details, among other things, the periods before, during, and after the crisis, what led up to it, and analyses of subprime mortgage lending, credit expansion and banking policies, the collapse of companies like Fannie Mae and Freddie Mac, and the federal bailouts of Lehman and AIG. It also discusses the aftermath of the fallout and our current state. This report should be of interest to anyone concerned about the financial situation in the U.S. and around the world.THE FINANCIAL CRISIS INQUIRY COMMISSION is an independent, bi-partisan, government-appointed panel of 10 people that was created to "examine the causes, domestic and global, of the current financial and economic crisis in the United States." It was established as part of the Fraud Enforcement and Recovery Act of 2009. The commission consisted of private citizens with expertise in economics and finance, banking, housing, market regulation, and consumer protection. They examined and reported on "the collapse of major financial institutions that failed or would have failed if not for exceptional assistance from the government."News Dissector DANNY SCHECHTER is a journalist, blogger and filmmaker. He has been reporting on economic crises since the 1980's when he was with ABC News. His film In Debt We Trust warned of the economic meltdown in 2006. He has since written three books on the subject including Plunder: Investigating Our Economic Calamity (Cosimo Books, 2008), and The Crime Of Our Time: Why Wall Street Is Not Too Big to Jail (Disinfo Books, 2011), a companion to his latest film Plunder The Crime Of Our Time. He can be reached online at www.newsdissector.com.
Author:
Publisher: Lulu.com
ISBN: 9291316695
Category : Bank capital
Languages : en
Pages : 294
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Book Description
Author: Mr.Luc Laeven
Publisher: International Monetary Fund
ISBN: 1484363728
Category : Business & Economics
Languages : en
Pages : 34
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Book Description
The proposed SDN documents the evolution of bank size and activities over the past 20 years. It discusses whether this evolution can be explained by economies of scale or “too big to fail” subsidies. The paper then presents evidence on the extent to which bank size and market-based activities contribute to systemic risk. The paper concludes with policy messages in the area of capital regulation and activity restrictions to reduce the systemic risk posed by large banks. The analysis of the paper complements earlier Fund work, including SDN 13/04 and the recent GFSR chapter on “too big to fail” subsidies, and its policy message is in line with this earlier work.
Author: Hennie van Greuning
Publisher: World Bank Publications
ISBN: 0821378988
Category : Business & Economics
Languages : en
Pages : 442
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Book Description
This book provides a comprehensive overview of topics focusing on assessment, analysis, and management of financial risks in banking. The publication emphasizes risk-management principles and stresses that key players in the corporate governance process are accountable for managing the different dimensions of financial risk. This third edition remains faithful to the objectives of the original publication. A significant new edition is the inclusion of chapters on the management of the treasury function. Advances made by the Basel Committee on Banking Supervision are reflected in the chapters on capital adequacy, transparency, and banking supervision. This publication should be of interest to a wide body of users of bank financial data. The target audience includes persons responsible for the analysis of banks and for the senior management or organizations directing their efforts.
Author: Harry DeAngelo
Publisher: Now Publishers Inc
ISBN: 1601982046
Category : Corporations
Languages : en
Pages : 215
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Book Description
Corporate Payout Policy synthesizes the academic research on payout policy and explains "how much, when, and how". That is (i) the overall value of payouts over the life of the enterprise, (ii) the time profile of a firm's payouts across periods, and (iii) the form of those payouts. The authors conclude that today's theory does a good job of explaining the general features of corporate payout policies, but some important gaps remain. So while our emphasis is to clarify "what we know" about payout policy, the authors also identify a number of interesting unresolved questions for future research. Corporate Payout Policy discusses potential influences on corporate payout policy including managerial use of payouts to signal future earnings to outside investors, individuals' behavioral biases that lead to sentiment-based demands for distributions, the desire of large block stockholders to maintain corporate control, and personal tax incentives to defer payouts. The authors highlight four important "carry-away" points: the literature's focus on whether repurchases will (or should) drive out dividends is misplaced because it implicitly assumes that a single payout vehicle is optimal; extant empirical evidence is strongly incompatible with the notion that the primary purpose of dividends is to signal managers' views of future earnings to outside investors; over-confidence on the part of managers is potentially a first-order determinant of payout policy because it induces them to over-retain resources to invest in dubious projects and so behavioral biases may, in fact, turn out to be more important than agency costs in explaining why investors pressure firms to accelerate payouts; the influence of controlling stockholders on payout policy --- particularly in non-U.S. firms, where controlling stockholders are common --- is a promising area for future research. Corporate Payout Policy is required reading for both researchers and practitioners interested in understanding this central topic in corporate finance and governance.
