View - FASB
... like that of the S&L industry, ended up costing taxpayers about $151 billion by late 2011 and the meter is still running. It is interesting to note that some of their financial problems were ALM-related, that is, a result of hedging with interest rate swaps that went the wrong way and contributed to ...
... like that of the S&L industry, ended up costing taxpayers about $151 billion by late 2011 and the meter is still running. It is interesting to note that some of their financial problems were ALM-related, that is, a result of hedging with interest rate swaps that went the wrong way and contributed to ...
How different is the regulatory capital from the economic capital
... market. The paper addresses the issue of the ability of Basel 2 Internal Rating Based (IRB) formulas to hedge portfolio’s credit risk. Here, the analysis relies on an extension of the asymptotic single risk factor model (ASFR), which was used for the calibration of Basel II regulatory formulas. Ther ...
... market. The paper addresses the issue of the ability of Basel 2 Internal Rating Based (IRB) formulas to hedge portfolio’s credit risk. Here, the analysis relies on an extension of the asymptotic single risk factor model (ASFR), which was used for the calibration of Basel II regulatory formulas. Ther ...
Exchange Rates and the Foreign Exchange Market: An Asset
... measured in terms of dollars, prices in France were so much lower than they had been a few years before that a shopper’s savings could offset the cost of an airplane ticket from New York or Chicago. Five years later, however, the prices of French goods again looked high to Americans. What economic f ...
... measured in terms of dollars, prices in France were so much lower than they had been a few years before that a shopper’s savings could offset the cost of an airplane ticket from New York or Chicago. Five years later, however, the prices of French goods again looked high to Americans. What economic f ...
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... disturbance” (Greene 2000). In addition, if working with a panel data, we may use statistical classification to reduce computing size while keeping similarities within each class. Under the approach, individual agents within each group are said to have the same or similar characters. By combine the ...
... disturbance” (Greene 2000). In addition, if working with a panel data, we may use statistical classification to reduce computing size while keeping similarities within each class. Under the approach, individual agents within each group are said to have the same or similar characters. By combine the ...
ESRB/2014/1 - European Systemic Risk Board
... when risks from excessive credit growth recede. In principle, variables that perform well in the build-up phase of the countercyclical capital buffer may also inform the decision that the buffer should be maintained, reduced or fully released. These variables may, however, also provide misleading in ...
... when risks from excessive credit growth recede. In principle, variables that perform well in the build-up phase of the countercyclical capital buffer may also inform the decision that the buffer should be maintained, reduced or fully released. These variables may, however, also provide misleading in ...
Problems and Reforms in Mortgage
... regain confidence in complex investments like mortgage-backed securities, which will restore their trading value. As a result, our markets will stay innovative and become more transparent. Furthermore, our government will not have to assume excessive regulatory costs that will inhibit the government ...
... regain confidence in complex investments like mortgage-backed securities, which will restore their trading value. As a result, our markets will stay innovative and become more transparent. Furthermore, our government will not have to assume excessive regulatory costs that will inhibit the government ...
NBER WORKING PAPER SERIES AND CAPITAL STRUCTURE
... and assume exogenous bankruptcy costs. I calibrate the model with nine states, which are able to capture richer dynamics of the business cycle and make it possible to separate the effects of time-varying expected growth rates from economic uncertainty. Moreover, I estimate firms’ default losses via ...
... and assume exogenous bankruptcy costs. I calibrate the model with nine states, which are able to capture richer dynamics of the business cycle and make it possible to separate the effects of time-varying expected growth rates from economic uncertainty. Moreover, I estimate firms’ default losses via ...
Investment Analysis and Portfolio Management
... levels of default risk. Both Investments 4 and 5 have a maturity of eight years. Investment 5, however, has low liquidity and thus bears a liquidity premium. The difference between the interest rates of Investments 5 and 4 is 2.5 percentage points. The liquidity premium is 0.5 percentage point (from ...
... levels of default risk. Both Investments 4 and 5 have a maturity of eight years. Investment 5, however, has low liquidity and thus bears a liquidity premium. The difference between the interest rates of Investments 5 and 4 is 2.5 percentage points. The liquidity premium is 0.5 percentage point (from ...
True/False Questions
... 24. Financial intermediaries (FIs) can offer savers a safer, more liquid investment than a capital market security, even though the intermediary invests in risky illiquid instruments because: A) FIs can diversify away some of their risk B) FIs closely monitor the riskiness of their assets C) The fed ...
... 24. Financial intermediaries (FIs) can offer savers a safer, more liquid investment than a capital market security, even though the intermediary invests in risky illiquid instruments because: A) FIs can diversify away some of their risk B) FIs closely monitor the riskiness of their assets C) The fed ...
Saving, Investment and the Financial System
... lend out, rather than use for their own consumption. ...
... lend out, rather than use for their own consumption. ...
On Credit Risk Modeling and Management
... Bank for International Settlements (BIS): ”the obligor is unlikely to pay its credit obligations or the obligor is past due more than 90 days on any material credit obligation” This is clearly an unclear definition Furthermore, in retail banking especially, it is very usual that obligors repay their ...
... Bank for International Settlements (BIS): ”the obligor is unlikely to pay its credit obligations or the obligor is past due more than 90 days on any material credit obligation” This is clearly an unclear definition Furthermore, in retail banking especially, it is very usual that obligors repay their ...
The Liquidity Premium of Near-Money Assets
... The opportunity-cost-of-money theory suggests that reserve remuneration policies of central banks could potentially change the relationship between the level of short-term interest rates and liquidity premia of near-money assets. Paying interest on reserves (IOR) drastically reduces the opportunity ...
... The opportunity-cost-of-money theory suggests that reserve remuneration policies of central banks could potentially change the relationship between the level of short-term interest rates and liquidity premia of near-money assets. Paying interest on reserves (IOR) drastically reduces the opportunity ...
Chapter One * Introduction - Mutual Fund Directors Forum
... Some beneficial owners may also utilize securities lending as a means to raise cash. The cash collateral received against the lent security may be a cheaper cash raising option than more traditional methods. The cash can be used to finance specific projects or other fund specific cash requirements. ...
... Some beneficial owners may also utilize securities lending as a means to raise cash. The cash collateral received against the lent security may be a cheaper cash raising option than more traditional methods. The cash can be used to finance specific projects or other fund specific cash requirements. ...
Methods of Loan Guarantee Valuation and Accounting
... upper limit on the total value of guarantees. Guarantees are counted against this upper limit in various ways, including, in extreme cases, at the full face value of the underlying loans guaranteed plus interest payments due, even though the expected probability of default is significantly less than ...
... upper limit on the total value of guarantees. Guarantees are counted against this upper limit in various ways, including, in extreme cases, at the full face value of the underlying loans guaranteed plus interest payments due, even though the expected probability of default is significantly less than ...
Accounts and Notes Receivable
... Receivables – Why they are important At this point, we begin to study financial accounting topics not covered in Accounting 100. This chapter will be challenging because all material is new. Therefore, make certain to devote the proper amount of time to the course material. A receivable is an amount ...
... Receivables – Why they are important At this point, we begin to study financial accounting topics not covered in Accounting 100. This chapter will be challenging because all material is new. Therefore, make certain to devote the proper amount of time to the course material. A receivable is an amount ...
chinese bank`s credit risk assessment - STORRE
... The current striking problem in Chinese banking is the large amount of NonPerforming Loans (NPLs) and this research aims to address the NPLs through improving credit risk management. Rather than the previous literature where Western models are introduced into China directly or with minor modificatio ...
... The current striking problem in Chinese banking is the large amount of NonPerforming Loans (NPLs) and this research aims to address the NPLs through improving credit risk management. Rather than the previous literature where Western models are introduced into China directly or with minor modificatio ...
NBER WORKING PAPER SERIES INTERNATIONAL RESERVE HOLDINGS WITH Joshua Aizenman
... order to reduce that ratio may be welfare reducing. Indeed, increasing international reserves may increase the chance of financial crisis rather than reduce it. The rest of the paper is organized as follows. In Section 2 we illustrate the confusion surrounding the appropriate level of reserves to ho ...
... order to reduce that ratio may be welfare reducing. Indeed, increasing international reserves may increase the chance of financial crisis rather than reduce it. The rest of the paper is organized as follows. In Section 2 we illustrate the confusion surrounding the appropriate level of reserves to ho ...
Risk premiums in NIBOR and other countries` interbank lending rates
... example, are referenced against NIBOR. When banks and other non‐financial enterprises issue floating‐rate bonds, the interest rate may be equal to NIBOR plus a premium determined by the issuer’s credit risk and maturity premiums. Interbank rates are also used in the valuation of financial derivat ...
... example, are referenced against NIBOR. When banks and other non‐financial enterprises issue floating‐rate bonds, the interest rate may be equal to NIBOR plus a premium determined by the issuer’s credit risk and maturity premiums. Interbank rates are also used in the valuation of financial derivat ...
words - Investor Relations Solutions
... Basis of Presentation The accompanying unaudited consolidated financial statements include the financial statements of the Company, its wholly-owned subsidiaries, and its 80% -owned subsidiary, CAIJ, Inc. (CAIJ). The equity attributable to the minority interest in CAIJ is shown as a non-controlling ...
... Basis of Presentation The accompanying unaudited consolidated financial statements include the financial statements of the Company, its wholly-owned subsidiaries, and its 80% -owned subsidiary, CAIJ, Inc. (CAIJ). The equity attributable to the minority interest in CAIJ is shown as a non-controlling ...
The Valuation of Collateralised Debt Obligations - DORAS
... period setting A model is also developed which reproduces Moody’s CDO rating The Moody’s rating is compared to that which is implied from applying the nsk-neutral model, the differences analysed and the implications for regulatory capital for CDOs explored ...
... period setting A model is also developed which reproduces Moody’s CDO rating The Moody’s rating is compared to that which is implied from applying the nsk-neutral model, the differences analysed and the implications for regulatory capital for CDOs explored ...
The Risk-free Rate and the Market Risk Premium
... In the interests of transparency and to promote informed discussion, the Authority would prefer submissions to be made publicly available wherever this is reasonable. However, if a person making a submission does not want that submission to be public, that person should claim confidentiality in resp ...
... In the interests of transparency and to promote informed discussion, the Authority would prefer submissions to be made publicly available wherever this is reasonable. However, if a person making a submission does not want that submission to be public, that person should claim confidentiality in resp ...
Location Efficient Mortgages: Is the Rationale
... to promote them. According to Avery et al. (1996), even relatively small increases in default rates can make a mortgage programs targeted to low- and moderate-income borrowers unprofitable (641). Since LEMs have only recently been introduced, there are no empirical studies to provide guidance on the ...
... to promote them. According to Avery et al. (1996), even relatively small increases in default rates can make a mortgage programs targeted to low- and moderate-income borrowers unprofitable (641). Since LEMs have only recently been introduced, there are no empirical studies to provide guidance on the ...
What Else Can Central Banks Do? - Economics
... in stimulus. Although there is a limit to how far below zero interest rates can go, it is likely that rates could go somewhat further than what has been done so far without adverse consequences. ...
... in stimulus. Although there is a limit to how far below zero interest rates can go, it is likely that rates could go somewhat further than what has been done so far without adverse consequences. ...
Default Risk and Aggregate Fluctuations in Emerging Economies
... fluctuations have on business cycles and find that interest rate shocks can account for 50% of the volatility of output. Uribe and Yue (2003) construct an empirical VAR to uncover the relationship between country interest rates and output, and then estimate with a theoretical model this relationshi ...
... fluctuations have on business cycles and find that interest rate shocks can account for 50% of the volatility of output. Uribe and Yue (2003) construct an empirical VAR to uncover the relationship between country interest rates and output, and then estimate with a theoretical model this relationshi ...
EAST WEST BANCORP INC (Form: 10-Q, Received
... verbs. You should not place undue reliance on these statements, as they are subject to risks and uncertainties, including, but not limited to, those described in the documents incorporated by reference. When considering these forward-looking statements, you should keep in mind these risks and uncert ...
... verbs. You should not place undue reliance on these statements, as they are subject to risks and uncertainties, including, but not limited to, those described in the documents incorporated by reference. When considering these forward-looking statements, you should keep in mind these risks and uncert ...
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.