How and Why Credit Rating Agencies are not Like Other Gatekeepers
... agencies to generate accurate and reliable information led to public arguments for regulation of the credit rating industry.22 Yet the agencies were not regulated, in part because regulators perceived that they did not play a prominent role in the financial system. During the early 1970s, the SEC d ...
... agencies to generate accurate and reliable information led to public arguments for regulation of the credit rating industry.22 Yet the agencies were not regulated, in part because regulators perceived that they did not play a prominent role in the financial system. During the early 1970s, the SEC d ...
Explaining the BNDES
... With the purpose of contributing to the production of knowledge in the field of International Relations, with a special emphasis on aspects related to Brazil’s insertion into the world stage, the Brazilian Center for International Relations (CEBRI) established a program through which selected guest ...
... With the purpose of contributing to the production of knowledge in the field of International Relations, with a special emphasis on aspects related to Brazil’s insertion into the world stage, the Brazilian Center for International Relations (CEBRI) established a program through which selected guest ...
The use of intangible assets as loan collateral
... percent of total assets. Moreover, the average firm in my sample that pledged intangibles as collateral has intangible assets of $237 million (excluding goodwill), thus these borrowers successfully leveraged 18 percent of the value of their intangible assets. Finally, I find that loans secured by i ...
... percent of total assets. Moreover, the average firm in my sample that pledged intangibles as collateral has intangible assets of $237 million (excluding goodwill), thus these borrowers successfully leveraged 18 percent of the value of their intangible assets. Finally, I find that loans secured by i ...
Notes on Macroeconomic Theory
... Note that (1.15) and (1.20) are identical, and the solution we get for c from the social planner's problem by substituting in the constraint will yield the same solution as from (1.18). That is, the competitive equilibrium and the Pareto optimum are identical here. Further, since u(¢; ¢) is strictly ...
... Note that (1.15) and (1.20) are identical, and the solution we get for c from the social planner's problem by substituting in the constraint will yield the same solution as from (1.18). That is, the competitive equilibrium and the Pareto optimum are identical here. Further, since u(¢; ¢) is strictly ...
NBER WORKING PAPER SERIES BUBBLY LIQUIDITY Emmanuel Farhi Jean Tirole
... Typically, bubbles do not lead to Pareto improvements. For example, the holders of outside liquidity in general lose from the emergence of a bubble, since it increases interest rates and lowers the price at which ...
... Typically, bubbles do not lead to Pareto improvements. For example, the holders of outside liquidity in general lose from the emergence of a bubble, since it increases interest rates and lowers the price at which ...
The Risk-Free Rate`s Impact on Stock Returns with Representative
... management creates an agency problem since the fund has an incentive to maximize its profits rather than the risk-adjusted returns. This may result in excessive risk taking, the funds can increase their expected compensation through increasing the variance of their returns. Rajan also points out tha ...
... management creates an agency problem since the fund has an incentive to maximize its profits rather than the risk-adjusted returns. This may result in excessive risk taking, the funds can increase their expected compensation through increasing the variance of their returns. Rajan also points out tha ...
N - Personal.psu.edu
... 2. Implementation lag: The implementation lag represents the time lag between recognizing a need for discretionary policy and the time it takes to implement the policy (i.e., how long it takes the fiscal authorities to turn the wheel. For Fiscal policy, this lag can be quite long since our elected ...
... 2. Implementation lag: The implementation lag represents the time lag between recognizing a need for discretionary policy and the time it takes to implement the policy (i.e., how long it takes the fiscal authorities to turn the wheel. For Fiscal policy, this lag can be quite long since our elected ...
The Long-Run Discount Rate Controversy
... consider a firm with a safe project. Competition in the capital market implies that the firm will offer its lenders a return on their capital that is not different from the risk-free market interest rate. To generate a profit, the return to the project must exceed this rate. Thus, firms should use t ...
... consider a firm with a safe project. Competition in the capital market implies that the firm will offer its lenders a return on their capital that is not different from the risk-free market interest rate. To generate a profit, the return to the project must exceed this rate. Thus, firms should use t ...
Does Debtor Protection Really Protect Debtors? Evidence from the Small Business Credit Market
... greater debtor protection increases the incidence of business collateral. Taken together, these two results suggest that high levels of debtor protection induce a substitution from personal real estate collateral towards business collateral. Fourth, for the limited liability firms, we do not find a ...
... greater debtor protection increases the incidence of business collateral. Taken together, these two results suggest that high levels of debtor protection induce a substitution from personal real estate collateral towards business collateral. Fourth, for the limited liability firms, we do not find a ...
The Anatomy of a Credit Crisis: The Boom and Bust in Farm Land
... The nature of land markets may exacerbate these effects. Scheinkman and Xiong (2003) argue that low transaction costs and a ban on short sales play a central role in allowing disagreement over fundamentals and overconfidence to lead to speculative trading: Investors bid up the price of land beyond t ...
... The nature of land markets may exacerbate these effects. Scheinkman and Xiong (2003) argue that low transaction costs and a ban on short sales play a central role in allowing disagreement over fundamentals and overconfidence to lead to speculative trading: Investors bid up the price of land beyond t ...
Investor Report RBS Citizens Financial Group, Inc. March 31, 2013
... The quarter’s performance was driven by stable revenues on a smaller base of interest-earning assets, improved expenses, and improved credit. Total revenues (net interest income and noninterest income) of $1.2 billion were down 2.2% from a year ago reflecting challenges in the broader economy and dr ...
... The quarter’s performance was driven by stable revenues on a smaller base of interest-earning assets, improved expenses, and improved credit. Total revenues (net interest income and noninterest income) of $1.2 billion were down 2.2% from a year ago reflecting challenges in the broader economy and dr ...
The Long-Run Performance of German Stock Mutual Funds
... unweighted average rates of return, the underperformance is reduced by 40 %. For large funds, on the average, the underperformance is less than for small funds. When we look at the value-weighted means of individual fund returns, the underperformance nearly disappears. ...
... unweighted average rates of return, the underperformance is reduced by 40 %. For large funds, on the average, the underperformance is less than for small funds. When we look at the value-weighted means of individual fund returns, the underperformance nearly disappears. ...
Equilibrium Cross-Section of Returns
... The cross-sectional properties of stock returns have attracted considerable attention in recent empirical literature in financial economics. One of the best known studies, by Fama and French (1992), uncovers the relations between firm characteristics such as book-to-market ratio and firm size and stock ...
... The cross-sectional properties of stock returns have attracted considerable attention in recent empirical literature in financial economics. One of the best known studies, by Fama and French (1992), uncovers the relations between firm characteristics such as book-to-market ratio and firm size and stock ...
Sample Chapter - McGraw Hill Higher Education
... single period. But often you will be interested in average returns over longer periods of time. For example, you might want to measure how well a mutual fund has performed over the preceding five-year period. In this case, return measurement is more ambiguous. Consider a fund that starts with $1 mil ...
... single period. But often you will be interested in average returns over longer periods of time. For example, you might want to measure how well a mutual fund has performed over the preceding five-year period. In this case, return measurement is more ambiguous. Consider a fund that starts with $1 mil ...
Fiscal Rules and Discretion in a World Economy
... in light of our main result, is whether additional instruments can enhance welfare when governments’ present bias is large and thus the disciplining effect of the interest rate dominates the redistributive effect. While linear taxes have no effect in our setting, we show that using a coordinated fis ...
... in light of our main result, is whether additional instruments can enhance welfare when governments’ present bias is large and thus the disciplining effect of the interest rate dominates the redistributive effect. While linear taxes have no effect in our setting, we show that using a coordinated fis ...
NBER WORKING PAPER SERIES COMPETING LIQUIDITIES: CORPORATE SECURITIES, REAL BONDS AND BUBBLES
... Intuition and classic growth theory both suggest that stores of value and asset bubbles raise interest rates and crowd out productive investment. While the interest rate response is rather undisputed, the competition effect does not seem to capture the entire investment story in some famous episodes. ...
... Intuition and classic growth theory both suggest that stores of value and asset bubbles raise interest rates and crowd out productive investment. While the interest rate response is rather undisputed, the competition effect does not seem to capture the entire investment story in some famous episodes. ...
Cheap Credit, Collateral and the Boom-Bust Cycle
... expanded, this time endogenously, because of higher house prices. This will result in a boom-bust pattern that is amplified in inelastic regions. In order to test the qualitative implications of my model at the reduced-form quantitative level, I build on a series of studies by Mian and Sufi (2009, ...
... expanded, this time endogenously, because of higher house prices. This will result in a boom-bust pattern that is amplified in inelastic regions. In order to test the qualitative implications of my model at the reduced-form quantitative level, I build on a series of studies by Mian and Sufi (2009, ...
The Impact of Higher Interest Rates on the Cost of Servicing
... An important fact to consider when assessing the medium-term fiscal plans announced by the federal and provincial governments is that interest rates are at historically low levels. A return to more normal levels would jeopardize promises for balanced budgets or surpluses and increase the proportion ...
... An important fact to consider when assessing the medium-term fiscal plans announced by the federal and provincial governments is that interest rates are at historically low levels. A return to more normal levels would jeopardize promises for balanced budgets or surpluses and increase the proportion ...
Top of Form Week 4: Internal Control, Cash and Receivables
... Receivables are amounts due from customers of the company. They are located in a balance sheet account called accounts and notes receivable. The uncollected accounts create a need for funding that business can be conducted to cover a loan from a bank if its cash flow projections were too optimistic. ...
... Receivables are amounts due from customers of the company. They are located in a balance sheet account called accounts and notes receivable. The uncollected accounts create a need for funding that business can be conducted to cover a loan from a bank if its cash flow projections were too optimistic. ...
Margin-Based Asset Pricing and Deviations from the Law of One Price
... (1997), Geanakoplos (1997), Kiyotaki and Moore (1997), Caballero and Krishnamurthy (2001), Lustig and Van Nieuwerburgh (2005), Coen-Pirani (2005), Fostel and Geanakoplos (2008)) and the possibility of arbitrage in equilibrium (Basak and Croitoru (2000, 2006), Geanakoplos (2003)). Also, the paper is ...
... (1997), Geanakoplos (1997), Kiyotaki and Moore (1997), Caballero and Krishnamurthy (2001), Lustig and Van Nieuwerburgh (2005), Coen-Pirani (2005), Fostel and Geanakoplos (2008)) and the possibility of arbitrage in equilibrium (Basak and Croitoru (2000, 2006), Geanakoplos (2003)). Also, the paper is ...
ICRA Lanka`s Credit Rating Methodology for Non
... While several parameters are used to assess an NBFC’s business and financial risks, the relative importance of each of these parameters can vary across companies, depending on its potential to change the overall risk profile of the company concerned. For instance, in a benign operating environment, ...
... While several parameters are used to assess an NBFC’s business and financial risks, the relative importance of each of these parameters can vary across companies, depending on its potential to change the overall risk profile of the company concerned. For instance, in a benign operating environment, ...
Rent growth continues, albeit at a slower pace, amid hefty new
... • After Q3 2015’s more modest pace of investment, Q4 2015 closed with a record multifamily investment total of $43 billion. • CBRE Research’s buyer underwriting survey of prime mid- and high-rise product revealed a transactional environment that is still very competitive, with unlevered target IRRs ...
... • After Q3 2015’s more modest pace of investment, Q4 2015 closed with a record multifamily investment total of $43 billion. • CBRE Research’s buyer underwriting survey of prime mid- and high-rise product revealed a transactional environment that is still very competitive, with unlevered target IRRs ...
Crowding out disclosure: Amplification and stress test designWe
... High quality types do not pay for costly signals (such as disclosure) if their quality is likely to be revealed by public signals. In the light of our analysis, the empirical relevance of this hypothesis is strengthened substantially. ‘Reverse unraveling’ amplifies non-disclosure at the top, and as ...
... High quality types do not pay for costly signals (such as disclosure) if their quality is likely to be revealed by public signals. In the light of our analysis, the empirical relevance of this hypothesis is strengthened substantially. ‘Reverse unraveling’ amplifies non-disclosure at the top, and as ...
Pre-Sale Fitch - The Paragon Group of Companies
... Among others, the main concern is that due to the manual process used to underwrite the mortgages if the number of applications were to rise sharply then the quality of the underwriting could suffer as a consequence of the increased workload. In Fitch’s view, strengths to consider are: (1) all appli ...
... Among others, the main concern is that due to the manual process used to underwrite the mortgages if the number of applications were to rise sharply then the quality of the underwriting could suffer as a consequence of the increased workload. In Fitch’s view, strengths to consider are: (1) all appli ...
Improving international access to credit markets report
... involved detailed desk-based research ...
... involved detailed desk-based research ...
Credit rationing
Credit rationing refers to the situation where lenders limit the supply of additional credit to borrowers who demand funds, even if the latter are willing to pay higher interest rates. It is an example of market imperfection, or market failure, as the price mechanism fails to bring about equilibrium in the market. It should not be confused with cases where credit is simply ""too expensive"" for some borrowers, that is, situations where the interest rate is deemed too high. On the contrary, the borrower would like to acquire the funds at the current rates, and the imperfection refers to the absence of equilibrium in spite of willing borrowers. In other words, at the prevailing market interest rate, demand exceeds supply, but lenders are not willing to either loan more funds, or raise the interest rate charged, as they are already maximising profits.