Complete issue
... The interest rate was set at a low level when inflation declined through 2003, which gradually led to prospects for higher inflation. Since summer 2005, the key policy rate has gradually been raised towards a more normal level. The key policy rate was increased well before inflation moved close to 2 ...
... The interest rate was set at a low level when inflation declined through 2003, which gradually led to prospects for higher inflation. Since summer 2005, the key policy rate has gradually been raised towards a more normal level. The key policy rate was increased well before inflation moved close to 2 ...
Inflation Report
... The lower limit for the strategy interval has therefore been increased to 1½%. The uncertainty surrounding economic developments implies that we should adhere to an interval of 1 percentage point for interest rate setting. On the one hand, monetary policy shall be aimed at bringing inflation up to t ...
... The lower limit for the strategy interval has therefore been increased to 1½%. The uncertainty surrounding economic developments implies that we should adhere to an interval of 1 percentage point for interest rate setting. On the one hand, monetary policy shall be aimed at bringing inflation up to t ...
The role of information asymmetry and financial reporting quality in
... traders into public information in the secondary loan market. The effect of timely loss recognition on the effectiveness of debt agreements and its influence on the borrower’s information environment make the secondary loan market an excellent empirical setting in which to explore the importance of ...
... traders into public information in the secondary loan market. The effect of timely loss recognition on the effectiveness of debt agreements and its influence on the borrower’s information environment make the secondary loan market an excellent empirical setting in which to explore the importance of ...
NBER WORKING PAPER SERIES THE ASYMMETRIC EFFECTS OF FINANCIAL FRICTIONS
... to borrowers for free and observable to lenders only at a cost. I show that the financial frictions created by this costly state verification increase the asymmetry in the movements of lending rates, investment, and output. The basic setting of my model is straightforward: entrepreneurs can start a ...
... to borrowers for free and observable to lenders only at a cost. I show that the financial frictions created by this costly state verification increase the asymmetry in the movements of lending rates, investment, and output. The basic setting of my model is straightforward: entrepreneurs can start a ...
Linkages across Sovereign Debt Markets
... renegotiate together in turn gives incentives for both countries to default together and take advantage of the lower recovery during renegotiation. The bond price schedule incorporates the lenders’ cost of funds and the risk-adjusted default probability and recovery rate. When the foreign country de ...
... renegotiate together in turn gives incentives for both countries to default together and take advantage of the lower recovery during renegotiation. The bond price schedule incorporates the lenders’ cost of funds and the risk-adjusted default probability and recovery rate. When the foreign country de ...
How to Discount Cashflows with Time
... rate remains constant. Since the total expected return comprises both a riskfree rate and a risk premium, adjusted by a factor loading, time-varying riskfree rates imply that total expected returns also change through time. Note that even an investor who believes that the expected market excess retu ...
... rate remains constant. Since the total expected return comprises both a riskfree rate and a risk premium, adjusted by a factor loading, time-varying riskfree rates imply that total expected returns also change through time. Note that even an investor who believes that the expected market excess retu ...
More Credit with Fewer Crises - weforum.org
... the financial system to detect and constrain pockets of excessive credit. Those gathered in Davos were determined to “rethink, redesign and rebuild” the institutions and practices that made the financial crisis possible. Some of the discussions also contained thoughts on recovery, highlighting previ ...
... the financial system to detect and constrain pockets of excessive credit. Those gathered in Davos were determined to “rethink, redesign and rebuild” the institutions and practices that made the financial crisis possible. Some of the discussions also contained thoughts on recovery, highlighting previ ...
Calculator Output
... If interest rates decrease, a company may choose to buy back high interest rate bonds and reissue bonds at a lower interest rate. A company can help protect itself from decreases in interest rates by including a call feature allowing the company to repurchase bonds at a fixed price (like 2% over fac ...
... If interest rates decrease, a company may choose to buy back high interest rate bonds and reissue bonds at a lower interest rate. A company can help protect itself from decreases in interest rates by including a call feature allowing the company to repurchase bonds at a fixed price (like 2% over fac ...
Leverage Cycles and the Anxious Economy
... In the popular story about crises there are usually massive defaults and bankruptcies caused by failures to meet margin calls. But these events are rare, happening once or twice a decade. Our data describe events with 10 to 20 times the frequency, happening roughly twice a year. Moreover, asset trad ...
... In the popular story about crises there are usually massive defaults and bankruptcies caused by failures to meet margin calls. But these events are rare, happening once or twice a decade. Our data describe events with 10 to 20 times the frequency, happening roughly twice a year. Moreover, asset trad ...
Regulating Consumer Financial Products: Evidence from Credit Cards
... The CARD Act also included provisions to affect the repayment behavior of credit card borrowers. In particular, it required monthly credit card statements to prominently display the cost of repaying the balance when only making minimum payments, and to compare this to the cost of repaying the balanc ...
... The CARD Act also included provisions to affect the repayment behavior of credit card borrowers. In particular, it required monthly credit card statements to prominently display the cost of repaying the balance when only making minimum payments, and to compare this to the cost of repaying the balanc ...
Interest Rate, Credit to Private Sector, Inflation Rate, Money Supply
... credit, changes in household financial wealth, changes in employment and unemployment rate, capital and current account and others. Among the factors, the main reason affect the savings rate are interest rate, credit to private sector, inflation rate, money supply, and gross domestic product will be ...
... credit, changes in household financial wealth, changes in employment and unemployment rate, capital and current account and others. Among the factors, the main reason affect the savings rate are interest rate, credit to private sector, inflation rate, money supply, and gross domestic product will be ...
Macro-prudential Financial Regulation in presence of Regulatory
... In this paper, we present a model to study the incentives of …nancial intermediaries and borrowers in taking excessive risks, and rely on this framework to characterize optimal …nancial regulations.6 There are two novelties in our analysis. First, we highlight the central role of imperfections in ba ...
... In this paper, we present a model to study the incentives of …nancial intermediaries and borrowers in taking excessive risks, and rely on this framework to characterize optimal …nancial regulations.6 There are two novelties in our analysis. First, we highlight the central role of imperfections in ba ...
household debt and unemployment
... results are also in line with the findings of Dobbie and Goldsmith-Pinkham (2015), who find that limited recourse for mortgage debt—i.e. household limited liability—leads to a decrease in the employment rate.7 Brown and Matsa (forthcoming) find that an increase in an employer’s distress results in f ...
... results are also in line with the findings of Dobbie and Goldsmith-Pinkham (2015), who find that limited recourse for mortgage debt—i.e. household limited liability—leads to a decrease in the employment rate.7 Brown and Matsa (forthcoming) find that an increase in an employer’s distress results in f ...
Template for Treasury Research Papers
... The appeal of this style of explanation is that it would produce regular symmetric cycles like those in Chart 1. Moreover, the model has many features which appear to be applicable to the dwelling sector. Supply is fixed in the short term and only responds with a lag — with delays between planning, ...
... The appeal of this style of explanation is that it would produce regular symmetric cycles like those in Chart 1. Moreover, the model has many features which appear to be applicable to the dwelling sector. Supply is fixed in the short term and only responds with a lag — with delays between planning, ...
household debt and unemployment
... results are also in line with the findings of Dobbie and Goldsmith-Pinkham (2015), who find that limited recourse for mortgage debt—i.e. household limited liability—leads to a decrease in the employment rate.7 Brown and Matsa (forthcoming) find that an increase in an employer’s distress results in f ...
... results are also in line with the findings of Dobbie and Goldsmith-Pinkham (2015), who find that limited recourse for mortgage debt—i.e. household limited liability—leads to a decrease in the employment rate.7 Brown and Matsa (forthcoming) find that an increase in an employer’s distress results in f ...
Demography and the Long-Run Predictability of the Stock Market
... is a strong demographic effect, then the numerous young (and the few contemporaneous middle-aged) should rationally anticipate that investment returns will be relatively high. Since wages and dividends do not vary as dramatically with demographic shifts as do financial returns, they should anticipat ...
... is a strong demographic effect, then the numerous young (and the few contemporaneous middle-aged) should rationally anticipate that investment returns will be relatively high. Since wages and dividends do not vary as dramatically with demographic shifts as do financial returns, they should anticipat ...
gender differences in bank loan access
... of equity than male-owned ones (Carter and Shaw, 2006; Coleman and Robb, 2009), and this gap persists in the subsequent phases of their activity (Calcagnini and Lenti, 2008; Coleman and Robb, 2009). Further, female firms make more intensive use of the entrepreneur’s personal funds and a lower utilis ...
... of equity than male-owned ones (Carter and Shaw, 2006; Coleman and Robb, 2009), and this gap persists in the subsequent phases of their activity (Calcagnini and Lenti, 2008; Coleman and Robb, 2009). Further, female firms make more intensive use of the entrepreneur’s personal funds and a lower utilis ...
Privatizing Fannie and Freddie: Be Careful What
... with Treasury would provide about 5% capitalization and their current guarantee fee of 63 basis points would provide 3%, assuming the 10% after-tax return on equity that SIFIs are earning today. To cover the cost of the additional 2% capital needed, they would need to increase their guarantee fees b ...
... with Treasury would provide about 5% capitalization and their current guarantee fee of 63 basis points would provide 3%, assuming the 10% after-tax return on equity that SIFIs are earning today. To cover the cost of the additional 2% capital needed, they would need to increase their guarantee fees b ...
Bankruptcy Reform and the Housing Crisis.
... households, making it less likely that these households will declare bankruptcy, unsecured creditors are able to offer lower interest rates and engage in more risky lending.5 If we assume that a household must repay their unsecured debt if they default on their mortgage (and do not simultaneously d ...
... households, making it less likely that these households will declare bankruptcy, unsecured creditors are able to offer lower interest rates and engage in more risky lending.5 If we assume that a household must repay their unsecured debt if they default on their mortgage (and do not simultaneously d ...
Loan impairment modeling according to IAS 39 by
... •There are clearly defined criteria, so-called Trigger Events, for objective evidence of impairment •Possible Trigger Events according to IAS 39.59 and IAS 39.61 •Substantial financial difficulty of the issuer •Breach of contract, such as default or delinquency in interest or principal payments •Con ...
... •There are clearly defined criteria, so-called Trigger Events, for objective evidence of impairment •Possible Trigger Events according to IAS 39.59 and IAS 39.61 •Substantial financial difficulty of the issuer •Breach of contract, such as default or delinquency in interest or principal payments •Con ...
Learning objectives - ICAI Knowledge Gateway
... be based on qualitative factors, such as management − employee relations, with less consideration on direct financial returns. However, most investment proposals considered by management will require quantitative estimates of the benefits to be derived from accepting the project. A bad decision can ...
... be based on qualitative factors, such as management − employee relations, with less consideration on direct financial returns. However, most investment proposals considered by management will require quantitative estimates of the benefits to be derived from accepting the project. A bad decision can ...
MORTGAGE TERMINATIONS, HETEROGENEITY AND THE EXERCISE OF MORTGAGE OPTIONS B Y
... functions M Ž?.. The appropriate function is determined by choosing the optimal level of r, r U , and the optimal level of H, H U , at which to terminate the mortgage through default or prepayment. These are the levels of r and H that minimize M given equation Ž1. Žsee Kau, Keenan, Muller, and Epper ...
... functions M Ž?.. The appropriate function is determined by choosing the optimal level of r, r U , and the optimal level of H, H U , at which to terminate the mortgage through default or prepayment. These are the levels of r and H that minimize M given equation Ž1. Žsee Kau, Keenan, Muller, and Epper ...
Turning a Blind Eye: Wall Street Finance of Predatory Lending
... lending, we contend that the law should impose full, quantifiable assignee liability on securitized trusts that do not adopt adequate controls to filter out predatory loans from loan pools. Today, new automated due diligence software makes it technologically and economically efficient to screen out ...
... lending, we contend that the law should impose full, quantifiable assignee liability on securitized trusts that do not adopt adequate controls to filter out predatory loans from loan pools. Today, new automated due diligence software makes it technologically and economically efficient to screen out ...
Inflation Report 1/2003
... The Norwegian economy has diverged from cyclical developments among our trading partners. Global growth has been sluggish and well below growth potential. World equity prices have been declining since mid-2000. Monetary policy has been relaxed internationally in response to the weak outlook. Interes ...
... The Norwegian economy has diverged from cyclical developments among our trading partners. Global growth has been sluggish and well below growth potential. World equity prices have been declining since mid-2000. Monetary policy has been relaxed internationally in response to the weak outlook. Interes ...
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.