ESBies: Safety in the tranches
... We advocate Brunnermeier et al.’s proposal for a union-wide safe asset in three ways. First, in Section 4, simulations gauge ESBies’ safety. With a subordination level of 30%, ESBies have an expected loss rate slightly lower than German bunds. At the same time, they would approximately double the s ...
... We advocate Brunnermeier et al.’s proposal for a union-wide safe asset in three ways. First, in Section 4, simulations gauge ESBies’ safety. With a subordination level of 30%, ESBies have an expected loss rate slightly lower than German bunds. At the same time, they would approximately double the s ...
Responding to Shocks and Maintaining Stability in the West
... macroeconomic shocks.1 A symmetric shock—that is, a shock affecting similarly all members of a monetary union—can in principle be addressed by the common monetary policy or by a coordinated fiscal policy response. Monetary policy, however, cannot address an asymmetric shock, for which a (national) f ...
... macroeconomic shocks.1 A symmetric shock—that is, a shock affecting similarly all members of a monetary union—can in principle be addressed by the common monetary policy or by a coordinated fiscal policy response. Monetary policy, however, cannot address an asymmetric shock, for which a (national) f ...
Utility Cost of Capital
... Capital invested in rate base …the company will be allowed as large a return on the capital invested in its enterprise (which will be net to the company)… • Capital invested by customers would not be part of the company’s net capital investment • The utility is not entitled to any return on custome ...
... Capital invested in rate base …the company will be allowed as large a return on the capital invested in its enterprise (which will be net to the company)… • Capital invested by customers would not be part of the company’s net capital investment • The utility is not entitled to any return on custome ...
THE IMPACT OWNERSHIP STRUCTURE ON THE
... Liquidity and leverage risk are considered as one of the serious concerns and challenges for financial performance in organizations. Towards this end, the research sought to establish effect of liquidity and leverage on financial performance of commercial state corporations in the tourism industry i ...
... Liquidity and leverage risk are considered as one of the serious concerns and challenges for financial performance in organizations. Towards this end, the research sought to establish effect of liquidity and leverage on financial performance of commercial state corporations in the tourism industry i ...
The determinants of government bond yield spreads in
... With the European Monetary Union (EMU), EU policymakers seemed to have achieved their goal of creating a standardized European public debt market. Indeed, euro-area governments have witnessed a considerable narrowing in their borrowing costs following the introduction of the single currency. However ...
... With the European Monetary Union (EMU), EU policymakers seemed to have achieved their goal of creating a standardized European public debt market. Indeed, euro-area governments have witnessed a considerable narrowing in their borrowing costs following the introduction of the single currency. However ...
Trying To Understand All-Equity Firms
... contingent-claims model. They show that firms are not underlevered relative to the predictions of this model. Maximizing share value for a firm that is calibrated to be similar to the median Compustat firm results in an optimal debt-to-capital ratio of about 15%, which is below the median Compustat ...
... contingent-claims model. They show that firms are not underlevered relative to the predictions of this model. Maximizing share value for a firm that is calibrated to be similar to the median Compustat firm results in an optimal debt-to-capital ratio of about 15%, which is below the median Compustat ...
Ch16 - NYU Stern
... investments. You begin with a short examination of the different risk and return models that are often used to estimate the cost of equity, and the common elements and differences across these models. You then learn how to use these models to estimate the cost of equity for technology firms. Common ...
... investments. You begin with a short examination of the different risk and return models that are often used to estimate the cost of equity, and the common elements and differences across these models. You then learn how to use these models to estimate the cost of equity for technology firms. Common ...
Francesco Caprioli Optimal Fiscal Policy, Limited Commitment and Learning
... Whereas under full commitment the optimal distorting labour income tax is perfectly flat, under limited commitment it responds strongly to the incentives to default of both countries. When the Home Country would have an incentive to default, the tax rate decreases in order to allow for higher consu ...
... Whereas under full commitment the optimal distorting labour income tax is perfectly flat, under limited commitment it responds strongly to the incentives to default of both countries. When the Home Country would have an incentive to default, the tax rate decreases in order to allow for higher consu ...
The Trust Indenture Act of 1939 and Out-of
... The Congress and SEC that passed the TIA undoubtedly favored restructurings through bankruptcy.30 However, changing views among legal commentators, as well as changes in federal and state law, have undercut this strict policy preference for judicial supervision.31 Notably, many financial and legal s ...
... The Congress and SEC that passed the TIA undoubtedly favored restructurings through bankruptcy.30 However, changing views among legal commentators, as well as changes in federal and state law, have undercut this strict policy preference for judicial supervision.31 Notably, many financial and legal s ...
77 Illustration 1 : Cost of Irredeemable Debtntures : Borrower Ltd
... (e) Issue at Premium/Discount : (f) Expenses of Issue and difference between Face Value and Net Proceeds; (g) Redemption at premium and additional amount payable. Illustration 3 : Alternative Modes of Debt Company is considering raising funds of about Rs. 100 Lakhs by one of two alternative methods, ...
... (e) Issue at Premium/Discount : (f) Expenses of Issue and difference between Face Value and Net Proceeds; (g) Redemption at premium and additional amount payable. Illustration 3 : Alternative Modes of Debt Company is considering raising funds of about Rs. 100 Lakhs by one of two alternative methods, ...
Credit Availability, Start-up Financing, and Survival: Evidence from
... the highest quality start-ups do not apply for bank loans (or, alternatively, only the highest quality start-ups may be the ones that are able to raise bank debt) and (c) unobserved factors may influence both access to bank debt and start-up bankruptcy. Scholars require a quasi-natural experiment, ...
... the highest quality start-ups do not apply for bank loans (or, alternatively, only the highest quality start-ups may be the ones that are able to raise bank debt) and (c) unobserved factors may influence both access to bank debt and start-up bankruptcy. Scholars require a quasi-natural experiment, ...
Vertically Integrated Utilities Instructions
... Schedule I: Summary of Revenues and Expenses Column 1 of this schedule shall reflect information as reported on the utility's financial statements. All interest expenses other than interest on customer deposits should be excluded from Schedule I. All revenues received from "off-system" sales will be ...
... Schedule I: Summary of Revenues and Expenses Column 1 of this schedule shall reflect information as reported on the utility's financial statements. All interest expenses other than interest on customer deposits should be excluded from Schedule I. All revenues received from "off-system" sales will be ...
Efficient Bailouts? - Federal Reserve Bank of Minneapolis
... has taken center stage in discussions of financial regulatory reform. Many argue that bailouts are often necessary to prevent a complete meltdown of the financial sector, which would otherwise bring an extraordinary contraction in output and employment. An alternative view argues that bailouts are c ...
... has taken center stage in discussions of financial regulatory reform. Many argue that bailouts are often necessary to prevent a complete meltdown of the financial sector, which would otherwise bring an extraordinary contraction in output and employment. An alternative view argues that bailouts are c ...
Open-Market Operations in a Model of Regulated
... A once-for-all, open-market purchase-a central bank purchase of outstanding government bonds-decreases the amount of bonds and the liabilities of these bond funds and increases the amount of currency held by the public. Under the assumption that central bank resource costs are independent of its por ...
... A once-for-all, open-market purchase-a central bank purchase of outstanding government bonds-decreases the amount of bonds and the liabilities of these bond funds and increases the amount of currency held by the public. Under the assumption that central bank resource costs are independent of its por ...
Financial Flows to Developing Countries: Recent Trends and Prospects
... in real terms over the balance of the decade, three times that observed since the Monterrey Consensus in 2002. ...
... in real terms over the balance of the decade, three times that observed since the Monterrey Consensus in 2002. ...
Research and Monetary Policy Department Working Paper No:06/04
... EMBI spreads (default risk) due to a tightening cycle in industrial countries, could lead to a rise in the debt-to-GDP ratio by depreciating the domestic currency and raising domestic interest rates, which has the potential to ignite a self-fulfilling prophecy as in the second generation crisis mod ...
... EMBI spreads (default risk) due to a tightening cycle in industrial countries, could lead to a rise in the debt-to-GDP ratio by depreciating the domestic currency and raising domestic interest rates, which has the potential to ignite a self-fulfilling prophecy as in the second generation crisis mod ...
The Aggregate Demand for Treasury Debt
... supply of Treasury securities traces out a downward sloping demand curve for Treasuries. We estimate the semi-elasticity of the corporate bond spread to the Debt/GDP ratio, finding that a hypothetical increase in the Debt/GDP ratio from the current level of 0.37 to a new level of 0.38 will raise lon ...
... supply of Treasury securities traces out a downward sloping demand curve for Treasuries. We estimate the semi-elasticity of the corporate bond spread to the Debt/GDP ratio, finding that a hypothetical increase in the Debt/GDP ratio from the current level of 0.37 to a new level of 0.38 will raise lon ...
Firms` capital structure decisions and product market
... competition will be intense among firms to capture those opportunities. On the other hand, in the product market where there is no valuable investment opportunity (no positive NPV project), firms are not motivated to engage in competition. Because the cash flow from the new positive NPV investment r ...
... competition will be intense among firms to capture those opportunities. On the other hand, in the product market where there is no valuable investment opportunity (no positive NPV project), firms are not motivated to engage in competition. Because the cash flow from the new positive NPV investment r ...
Link - Validus Risk Management
... the volatility created by extrinsic risks (e.g. currency exposure) than a fund specializing in distressed debt, where expected returns are typically larger (providing a natural buffer against the potential adverse impacts of unforeseen financial market risks) and more volatile. Similarly, funds whic ...
... the volatility created by extrinsic risks (e.g. currency exposure) than a fund specializing in distressed debt, where expected returns are typically larger (providing a natural buffer against the potential adverse impacts of unforeseen financial market risks) and more volatile. Similarly, funds whic ...
A Pyrrhic Victory? – Bank Bailouts and Sovereign Credit Risk
... Our theoretical model consists of two sectors of the economy – “financial” and “corporate” (more broadly, also the household and other non-financial parts of the economy), and a government. The two sectors contribute jointly to produce aggregate output: the corporate sector makes productive investme ...
... Our theoretical model consists of two sectors of the economy – “financial” and “corporate” (more broadly, also the household and other non-financial parts of the economy), and a government. The two sectors contribute jointly to produce aggregate output: the corporate sector makes productive investme ...
Rating Agencies - Financial Policy Forum
... with the bank’s reputation. Alternatively, the bank as creditor would become more involved in the business of the corporation and become an insider. Bond investors, however, did not have the same access to information. (There were no disclosure requirements prior to the securities acts of 1933 and 1 ...
... with the bank’s reputation. Alternatively, the bank as creditor would become more involved in the business of the corporation and become an insider. Bond investors, however, did not have the same access to information. (There were no disclosure requirements prior to the securities acts of 1933 and 1 ...
Lecture Note One
... • 1. Increasing the debt level does not affect the riskiness of the assets, but it does increase the riskiness of the equity • In the same firm, RD is always less than RE, This is because the debt has a higher priority and this is less risky. But the weighted sum of the returns of debt and equity is ...
... • 1. Increasing the debt level does not affect the riskiness of the assets, but it does increase the riskiness of the equity • In the same firm, RD is always less than RE, This is because the debt has a higher priority and this is less risky. But the weighted sum of the returns of debt and equity is ...
PDF
... true even after controlling for other factors that determine default risk. Our estimation includes macroeconomic variables, such as GDP growth and external debt, as well as a credit rating score from Institutional Investor that captures political risk. Corruption plays an important role in determini ...
... true even after controlling for other factors that determine default risk. Our estimation includes macroeconomic variables, such as GDP growth and external debt, as well as a credit rating score from Institutional Investor that captures political risk. Corruption plays an important role in determini ...
INTER PIPELINE LTD. $3,000,000,000 Common Shares Preferred
... holders thereof will become entitled to receive Common Shares or such other securities, and any other terms specific to the Subscription Receipts being offered. Where required by statute, regulation or policy, and where Securities are offered in currencies other than Canadian dollars, appropriate di ...
... holders thereof will become entitled to receive Common Shares or such other securities, and any other terms specific to the Subscription Receipts being offered. Where required by statute, regulation or policy, and where Securities are offered in currencies other than Canadian dollars, appropriate di ...
Government debt
Government debt (also known as public debt, national debt and sovereign debt) is the debt owed by a central government. (In federal states, ""government debt"" may also refer to the debt of a state or provincial, municipal or local government.) By contrast, the annual ""government deficit"" refers to the difference between government receipts and spending in a single year, that is, the increase of debt over a particular year.Government debt is one method of financing government operations, but it is not the only method. Governments can also create money to monetize their debts, thereby removing the need to pay interest. But this practice simply reduces government interest costs rather than truly canceling government debt, and can result in hyperinflation if used unsparingly.Governments usually borrow by issuing securities, government bonds and bills. Less creditworthy countries sometimes borrow directly from a supranational organization (e.g. the World Bank) or international financial institutions.As the government draws its income from much of the population, government debt is an indirect debt of the taxpayers. Government debt can be categorized as internal debt (owed to lenders within the country) and external debt (owed to foreign lenders). Another common division of government debt is by duration until repayment is due. Short term debt is generally considered to be for one year or less, long term is for more than ten years. Medium term debt falls between these two boundaries. A broader definition of government debt may consider all government liabilities, including future pension payments and payments for goods and services the government has contracted but not yet paid.