credit growth, problem loans and credit risk
... savings banks, which represent more than 95% of the total assets of credit institutions. Although the level of the ratio differs, the cyclical pattern is very similar. The ratio of problem loans also differs by type of loan. Households and firms have different levels of bad loans. On average, the fo ...
... savings banks, which represent more than 95% of the total assets of credit institutions. Although the level of the ratio differs, the cyclical pattern is very similar. The ratio of problem loans also differs by type of loan. Households and firms have different levels of bad loans. On average, the fo ...
Discussion of
... Household Credit/GDP gap is a more important predictor of crises (in-sample) than Business Credit/GDP gap. Inclusion of Global Credit/GDP gap improves in-sample …t of model. “A tree’s risk of catching …re is usually small, except when the forest is ablaze.” –Jorda (IJCB 2011). Authors construct coun ...
... Household Credit/GDP gap is a more important predictor of crises (in-sample) than Business Credit/GDP gap. Inclusion of Global Credit/GDP gap improves in-sample …t of model. “A tree’s risk of catching …re is usually small, except when the forest is ablaze.” –Jorda (IJCB 2011). Authors construct coun ...
A lower neutral rate: causes and consequences
... the contrary, economic growth has been sluggish, well below what might have been expected to ensue from such low interest rates, while resources remain underutilized in many countries and almost all continue to struggle with below-target inflation. It’s little wonder, then, that people have pared th ...
... the contrary, economic growth has been sluggish, well below what might have been expected to ensue from such low interest rates, while resources remain underutilized in many countries and almost all continue to struggle with below-target inflation. It’s little wonder, then, that people have pared th ...
English - World Bank Treasury
... If Borrower chooses to have conversion options, please select ONLY one of the alternatives below for Caps/Collars: Cap/Collar premium to be financed out of the loan proceeds (as long as there are available funds to be disbursed) 5b Cap/Collar premium paid by the Borrower from own resources ...
... If Borrower chooses to have conversion options, please select ONLY one of the alternatives below for Caps/Collars: Cap/Collar premium to be financed out of the loan proceeds (as long as there are available funds to be disbursed) 5b Cap/Collar premium paid by the Borrower from own resources ...
Expected Return Standard Deviation Increasing Utility
... Investor’s preferences toward the exp. return and risk may be expressed by the utility function that is higher for higher exp. returns and lower for higher risks. More risk-averse investors will apply greater penalties for risk. The greater the risk, the larger the penalty. We can formalize the risk ...
... Investor’s preferences toward the exp. return and risk may be expressed by the utility function that is higher for higher exp. returns and lower for higher risks. More risk-averse investors will apply greater penalties for risk. The greater the risk, the larger the penalty. We can formalize the risk ...
PowerPoint-Präsentation
... Efficient Markets Efficient market hypothesis (EMH): in an efficient market, prices rapidly incorporate all relevant information Financial markets much larger, more competitive, more transparent, more homogeneous than product markets ...
... Efficient Markets Efficient market hypothesis (EMH): in an efficient market, prices rapidly incorporate all relevant information Financial markets much larger, more competitive, more transparent, more homogeneous than product markets ...
This PDF is a selection from a published volume from... Economic Research Volume Title: NBER Macroeconomics Annual 2007, Volume 22
... driven by the indivisibility of the projects, not by credit market imper here ismore subtle than fections, the role of the indivisibility assumption one might think. In the literature, it is often argued that the equilibrium is fundamentally difficult be imperfections analysis of credit market cause ...
... driven by the indivisibility of the projects, not by credit market imper here ismore subtle than fections, the role of the indivisibility assumption one might think. In the literature, it is often argued that the equilibrium is fundamentally difficult be imperfections analysis of credit market cause ...
Pindyck/Rubinfeld Microeconomics
... should be a risk-free interest rate, such as on government bonds. Suppose that rate is 9%. The discount rate should therefore be the real interest rate on government bonds. The 9% includes inflation. The real interest rate is the nominal rate minus the expected rate of inflation. If we expect inflat ...
... should be a risk-free interest rate, such as on government bonds. Suppose that rate is 9%. The discount rate should therefore be the real interest rate on government bonds. The 9% includes inflation. The real interest rate is the nominal rate minus the expected rate of inflation. If we expect inflat ...
Document
... We often employ scenario or “what if?” analysis in order to make better decisions, given the uncertain future. Scenario analysis involves looking at different outcomes for returns along with their associated probabilities of occurrence. ...
... We often employ scenario or “what if?” analysis in order to make better decisions, given the uncertain future. Scenario analysis involves looking at different outcomes for returns along with their associated probabilities of occurrence. ...
Chap 4 problem solutions
... financial intermediation, resources are allocated more effectively, and the real output of the economy is thereby increased. ...
... financial intermediation, resources are allocated more effectively, and the real output of the economy is thereby increased. ...
Secured Lending and Borrowers` Riskiness
... In the original model the equilibrium entails some degree of credit rationing. However, a possible alternative is to allow loan applicants to post a guarantee, so that safer borrowers can credibly signal their characteristics, and banks can screen potential borrowers by their degree of riskiness, an ...
... In the original model the equilibrium entails some degree of credit rationing. However, a possible alternative is to allow loan applicants to post a guarantee, so that safer borrowers can credibly signal their characteristics, and banks can screen potential borrowers by their degree of riskiness, an ...
Liquidity Markets Overview
... offers solid risk-adjusted yield opportunities for separate account mandates. The fact that the Eurozone situation is both a sovereign and a financial institution issue is directly reflected in what had been a sustained creeping up of LIBOR, as that short rate contains a banking credit component t ...
... offers solid risk-adjusted yield opportunities for separate account mandates. The fact that the Eurozone situation is both a sovereign and a financial institution issue is directly reflected in what had been a sustained creeping up of LIBOR, as that short rate contains a banking credit component t ...
What Distinguishes Larger and More Efficient Credit Unions?
... Second, t h e n e w b r e e d of credit u n i o n manager w h o has pushed for deregulation tends t o be younger, t o have formal training in finance or economics, and t o v i e w the j o b in t h e same way as t h e manager of a bank or S&L branch. Some, in fact come from a bank branch managem e n ...
... Second, t h e n e w b r e e d of credit u n i o n manager w h o has pushed for deregulation tends t o be younger, t o have formal training in finance or economics, and t o v i e w the j o b in t h e same way as t h e manager of a bank or S&L branch. Some, in fact come from a bank branch managem e n ...
The Irresistible Case for Moveable Collateral
... As of 2008 there are more than 70 countries with a unified registry system for all security rights in moveable property.3 World Bank Enterprise Surveys (2001-2005) covering firms in more than 60 low and middle-income countries indicated that 44% of corporate assets were in machinery compared wit ...
... As of 2008 there are more than 70 countries with a unified registry system for all security rights in moveable property.3 World Bank Enterprise Surveys (2001-2005) covering firms in more than 60 low and middle-income countries indicated that 44% of corporate assets were in machinery compared wit ...
Patrick Bayer, Duke University and NBER
... income and health shocks, 5 much less is known about the differential impact of credit and financial shocks, especially in housing markets.6 The literature suggests that subprime lending has been an important factor in explaining rising foreclosure rates in low income and minority neighborhoods.7 He ...
... income and health shocks, 5 much less is known about the differential impact of credit and financial shocks, especially in housing markets.6 The literature suggests that subprime lending has been an important factor in explaining rising foreclosure rates in low income and minority neighborhoods.7 He ...
A Two-Period International Investment Model Setting Up the The
... Determinants of Intertemporal Comparative Advantage • Differences in interest rates between countries are the result of (1) different indifference curves (consumer preferences) or (2) different ICPFs (different rates of return to investment). • Differences in intertemporal preferences reflect diffe ...
... Determinants of Intertemporal Comparative Advantage • Differences in interest rates between countries are the result of (1) different indifference curves (consumer preferences) or (2) different ICPFs (different rates of return to investment). • Differences in intertemporal preferences reflect diffe ...
Why do companies go public?
... have strongest positive effect on the likelihood of going public. Investment, leverage, profitability, interest rate, and credit concentration tend to decrease after listing. Independent firms are more likely to go public after high sales, high industry M/B, high profitability, high growth and high ...
... have strongest positive effect on the likelihood of going public. Investment, leverage, profitability, interest rate, and credit concentration tend to decrease after listing. Independent firms are more likely to go public after high sales, high industry M/B, high profitability, high growth and high ...
Introduction to Derivative Instruments
... Derivatives can be highly profitable because of the direct profit they generate or by the potential losses they contribute to erase Despite this, their public image nowadays is like… The reality is probably more like… ...
... Derivatives can be highly profitable because of the direct profit they generate or by the potential losses they contribute to erase Despite this, their public image nowadays is like… The reality is probably more like… ...
INTEREST PARITY (COVERED AND UNCOVERED)
... COVERED INTEREST PARITY exists when the returns on bonds denominated in different currencies are equal when it is assumed the forward markets are used to eliminate the ERR associated with future currency exchanges (i.e., when the bond matures). In the preceding example, since the return in the US (i ...
... COVERED INTEREST PARITY exists when the returns on bonds denominated in different currencies are equal when it is assumed the forward markets are used to eliminate the ERR associated with future currency exchanges (i.e., when the bond matures). In the preceding example, since the return in the US (i ...
Uncertainty, Default and Risk
... If a borrower of $1M at a rate of 10% has a 50% chance of default and will either pay back $750,000 or $1.1M, depending on default outcome, the lender sees an expected return lower than the 10% promised return desired or needed by the lender. Prob(Default) • Payment if Default + Prob(Solvent) • Paym ...
... If a borrower of $1M at a rate of 10% has a 50% chance of default and will either pay back $750,000 or $1.1M, depending on default outcome, the lender sees an expected return lower than the 10% promised return desired or needed by the lender. Prob(Default) • Payment if Default + Prob(Solvent) • Paym ...
Monetary transmission under competing corporate finance regimes
... monetary policy is more effective in generating and sustaining booms in a MBF or a BBF system. In other words, is the transmission of monetary policy to firm credit greater and smoother in one financial system compared to the other. This debate is nested within a larger contemporary debate of whethe ...
... monetary policy is more effective in generating and sustaining booms in a MBF or a BBF system. In other words, is the transmission of monetary policy to firm credit greater and smoother in one financial system compared to the other. This debate is nested within a larger contemporary debate of whethe ...
An Experienced View on Markets and Investing
... Litterman: Wasn’t one of Fischer Black’s original ideas to exploit this anomaly? Fama: Fischer’s idea was that the problem in the original CAPM was that it assumed that borrowing and lending were at the risk-free rate. He said if that assumption were thrown out, then all we would know about the prem ...
... Litterman: Wasn’t one of Fischer Black’s original ideas to exploit this anomaly? Fama: Fischer’s idea was that the problem in the original CAPM was that it assumed that borrowing and lending were at the risk-free rate. He said if that assumption were thrown out, then all we would know about the prem ...
4-_chap013_ppt_edited
... rate risk (cost of funds may rise and cost of funds may consume the spread) – If floating rate commitment, partially we can control risk by following a a prime rate (if prime rate rises so does the cost of commitment loans to the borrower) but there is still exposure to basis risk (prime rate rises ...
... rate risk (cost of funds may rise and cost of funds may consume the spread) – If floating rate commitment, partially we can control risk by following a a prime rate (if prime rate rises so does the cost of commitment loans to the borrower) but there is still exposure to basis risk (prime rate rises ...
January - sibstc
... Food inflation, on the other hand, showed a contrarian behavior, moving into double digits in December, reflecting both cyclical and structural factors. In contrast to WPI inflation, CPI inflation as measured by the new consumer price index, rose to 10.6 per cent in December, largely reflecting the ...
... Food inflation, on the other hand, showed a contrarian behavior, moving into double digits in December, reflecting both cyclical and structural factors. In contrast to WPI inflation, CPI inflation as measured by the new consumer price index, rose to 10.6 per cent in December, largely reflecting the ...
Moody`s Credit AssessmentTM Expanding Credit Horizons
... contingency within or outside the control of MOODY’S or any of its directors, officers, employees or agents in connection with the procurement, collection, compilation, analysis, interpretation, communication, publication or delivery of any such information, or (b) any direct, indirect, special, con ...
... contingency within or outside the control of MOODY’S or any of its directors, officers, employees or agents in connection with the procurement, collection, compilation, analysis, interpretation, communication, publication or delivery of any such information, or (b) any direct, indirect, special, con ...
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.