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Author: Jorge Guillen
Publisher:
ISBN: 9780549171201
Category :
Languages : en
Pages : 116
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Author: Jorge Guillen
Publisher:
ISBN: 9780549171201
Category :
Languages : en
Pages : 116
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Author: Jorge Braulio Guillén
Publisher:
ISBN:
Category : Banks and banking
Languages : en
Pages :
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Author: Yi-Kai Chen
Publisher:
ISBN:
Category : Banks and banking
Languages : en
Pages : 410
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Author: Rong Ma
Publisher:
ISBN:
Category : Banks and banking
Languages : en
Pages : 198
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Without question, global financial integration has accelerated in the last two decades. This acceleration is due, in part, to the opening of developing countries' financial markets to foreign banks, prompting many changes to financial systems in developing countries. This dissertation consists of three essays focusing on the impacts and the determinants of international banks' participation in the financial markets of developing countries. The first essay investigates whether banks with foreign owners are more willing to provide loans in the host country possibly contributing toward greater financial stability for that county. Specifically, I test whether foreign banks' lending behavior is different from domestic banks' behavior. Using a panel dataset with 1,643 commercial banks in 35 Asian and Latin American countries from 2000 to 2008, estimation reveals that foreign banks have not been more generous with respect to extending loans relative to domestic banks. Additionally, when grouping foreign banks by their geographic origins, a home region preference is found. International banks appear more likely to extend loans in markets located in their geographic region relative to markets in other areas of the globe. The second essay questions whether foreign ownership positively impacts bank performance. In addition I seek to understand which host characteristics affect bank performance. Bank-level data for 1600 commercial banks from 2000 through 2008 are used in estimation. Results suggest host countries' characteristics do affect the relative performance of foreign banks. While foreign ownership does not positively impact bank performance, foreign banks tend to outperform domestic banks in countries that are relatively closed and less competitive. Also, foreign banks do perform differently depending on their geographic origin. The third essay examines the impact of host characteristics and economic linkages on foreign bank entry into 30 Asian and Latin American countries. Of particular note is whether international migration from the bank host country to bank origin country influences foreign bank entry due to the networks it promotes. Using panel Tobit estimation, this study finds that international migration from developing to industrialized economies significantly promotes foreign bank presence in developing nations.
Author: Atif Mian
Publisher:
ISBN:
Category : Banks and banking
Languages : en
Pages : 105
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(Cont.) The third essay (joint with Daron Acemoglu and Michael Kremer) presents a theoretical analysis of the relative merits of markets, firms, and governments in environments where high powered incentives have both costs and benefits. Firms obscure information about workers' output, thus flattening incentives, and improving efficiency over markets. However in some cases, most notably under common shocks, firms are unable to commit to such a strategy. Under these circumstances, Governments may be able to commit to much flatter wage schedules, and improve the allocation of resources.
Author: Tirupam Goel
Publisher:
ISBN:
Category :
Languages : en
Pages : 125
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The broad goal of this dissertation is to further our understanding of the relationship between real and financial sectors of an economy, to identify inefficiencies in financial sector intermediation, and to design financial regulation policies that can address these inefficiencies. The three chapters of this dissertation contribute to specific aspects of the above goal. In the first chapter, I develop a general equilibrium macroeconomic model with a dynamic banking sector in order to characterize optimal size-dependent bank leverage regulation. Bank leverage choices are subject to the risk-return trade-off, and are inefficient due to financial frictions. I show that leverage regulation can generate welfare gains, and that optimal regulation is tighter relative to the benchmark and is bank-size dependent. In particular, optimal regulation is tighter for large banks relative to small banks, and it leads to the following welfare generating effects. First, as small banks take more leverage, they grow faster conditional on survival, leading to a selection effect. Second, small bank failures are less costly while entrants have higher relative efficiency, leading to a cleansing effect. Third, tighter regulation for large banks reduces their failure rate, which generates welfare since large banks are more efficient and costlier to replace, leading to a stabilization effect. The calibrated model rationalizes various steady state moments of the US banking industry, and points towards qualitatively similar but quantitatively tighter leverage regulation relative to the proposition in Basel III accords. In the second chapter, I study the financial contagion problem when banks in order to hedge against idiosyncratic shocks, engage in two-dimensional as opposed to one-dimensional interactions with other banks. To this end, I develop a double-edge interbank network model where banks engage in debt contract and securitization transactions with other banks. I show that the standard intuition of financial contagion does not translate from the one-dimensional case to the two-dimensional case i.e. financial contagion can either weaken or worsen depending on the network and parameter configuration. In particular, I derive parametrization for the case where financial contagion worsens. In the third chapter, we investigate whether countercyclical capital-ratio regulation (CCR) should be implemented strictly as a rule, or whether regulators should have discretion with respect to the timing and magnitude of changes in capital-ratio requirement. Using a simple model we prove the proposition that under information asymmetry, discretionary CCR leads to an increase in policy uncertainty relative to rule-based CCR. We prove a similar proposition for a general finite-horizon economy. Finally, we document that since discretionary CCR enables the regulator to respond to unexpected shocks, a benevolent regulator faces the welfare trade-off while choosing between rule-based and discretionary CCR.
Author: Jeremy Crimmel
Publisher:
ISBN:
Category :
Languages : en
Pages : 210
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Banks warrant special attention because of the key role they play in providing liquidity to the market, transforming assets, managing risks, and monitoring borrowers. Over the past few decades, the US banking system consolidated considerably which resulted in a more concentrated system where the majority of assets are controlled by a few excessively large institutions. This dissertation examines concentration of the US banking sector and its relationship with the real economy, idiosyncratic bank stability, and financial market volatility. Chapter 1 investigates the association between banking concentration and the real economy through the bank failures channel. To this end, we build a system of equations that estimates the association between banking concentration and the real economy by employing quarterly U.S. data from 1984 through 2013. The first equation tests the association between bank concentration and the rate of bank failure using an autoregressive Poisson model which allows for more accurate estimates than linear models. The remaining three equations model respectively, real GDP growth, unemployment, and inflation as functions of the rate of bank failure. Three interesting results are obtained. First, there is a threshold below which increasing concentration causes a reduction in bank failures and above which an increase in failures. Second, as bank failures increase, economic growth slows while unemployment and inflation both increase. Third, our results imply that the U.S. banking system is more than twice as concentrated as the optimal level as determined by the minimum rate of bank failure and is having a detrimental effect on the real economy. Our results suggest that while the Dodd-Frank Act of 2010 introduced legislation aimed in part at restricting the level of banking concentration, additional reductions in concentration may be necessary to strengthen the economy. Chapter 2 investigates the association between banking concentration and idiosyncratic bank stability after the passage of the Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994 into legislation. First, we model individual bank stability as a non-linear, as opposed to a linear, function of banking concentration allowing us to determine if rising concentration increases (decreases) bank stability up to a certain point and decreases (increases) it thereafter. Second, we differentiate between large and small banks by introducing an interaction term between concentration and bank size allowing us to determine if size-based differences alter the concentration-stability relationship. Third, we employ a fixed effects instrumental variable model and correct for reverse causality between bank stability and bank concentration. Our findings indicate that large and small banks react very differently to changes in concentration. As concentration exceeds a certain threshold, small banks become less stable, hold less capital, are less profitable, and hold more volatile portfolios. The results are the reverse for large banks. We also find that as concentration increases, large banks increasingly contribute to systemic risk, despite the fact that their idiosyncratic risk is reduced. Chapter 3 investigates the association between financial market volatility and banking concentration. Research on this relationship has been sparse and remains ambiguous. A main difficulty with achieving this task is the low frequency (quarterly) nature of the concentration data relative to the high frequency (daily) volatility data. To overcome this problem, we employ a GARCH-MIDAS volatility model which allows us to test the relationship between data with dissimilar frequencies. We consider the sample period 1986:1 to 2013:4. Our results indicate that higher levels of banking concentration are positively associated with higher volatility in the US stock, options, and corporate bond markets and negatively associated with the US government bond volatility. These finding fill a major void in the literature and have implications for regulators and policy makers.
Author: Haitao Xiang
Publisher:
ISBN:
Category : Banks and banking
Languages : en
Pages : 0
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The thesis consists of three studies on money, banking and monetary policy with modern monetary economic theory based on explicit micro-foundations. As an introduction to the approach adopted by micro-founded monetary theory, the introductory chapter demonstrates the roles of money and capital in a quasi-linear environment with explicit informational frictions. When capital serves as the only record-keeping device, there could be two possible stationary equilibria: one is first-best and the other is not. In a suboptimal equilibrium, consumers are constrained by their capital rental income. Introducing fiat money, a better record-keeping technology with higher rate of return, can improve welfare by relaxing the liquidity constraint. Chapter 2 studies the role of banking in financing investment. It is revealed that banking can mitigate underinvestment, raise capital-labour ratio, and improve welfare; and this effect is greatest under moderate inflation. In Chapter 3, I introduce a record-keeping cost related to bank borrowing, and study the effects of such a banking cost on economic allocations and welfare, as well as its monetary policy implications. Main findings are: Costly banking emerges endogenously only with relatively high inflation and/or relatively low banking cost; the existence of costly banking may improve or reduce welfare relative to the case without banking; with higher inflation rate or banking cost, more people would choose not to deal with banks, which means larger welfare loss; inflation is less harmful with banking than without banking. In Chapter 4, I investigate the trade-off between distribution effect and production effect of monetary policy with presence of idiosyncratic liquidity shocks. When liquidity shocks are observable, a type-contingent money transfer policy can desirably redistribute purchasing power among consumers. When the shocks are unobservable, an illiquid bond policy restores credit transactions on money through bond-money exchanges. Both policies have positive distribution effect, but the resulting inflation hampers production efficiency. I derive a sufficient condition under which the overall welfare can be improved by an inflationary monetary policy: if consumers are relative-risk-averse enough, the trade-off between distribution efficiency gain and production efficiency loss would result in net welfare enhancement.
Author: Emilia Bonaccorsi di Patti
Publisher:
ISBN:
Category :
Languages : en
Pages : 326
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Author: Junghee Park
Publisher:
ISBN:
Category :
Languages : en
Pages : 340
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