We investigate bank holding companies’ window dressing of quarter-end short-term borrowings. We find evidence of downward window dressing of short-term borrowings through repo and federal funds that appears material for a large fraction of the sample. Such downward window dressing is more pronounced at banks with higher leverage, lower capital adequacy ratios, and greater management compensatio...

A home is the single largest purchase that most households make, and it is one that usually requires some debt financing. Because housing debt is such a large component of households’ balance sheets, it is important to understand the financing decision. In this paper, we use household level data from the HILDA survey to relate households’ leverage to their observed characteristics using both gr...

The banks’ response to their changes in leverage ratios is examined and evaluated in this paper. This reaction can be interpreted as if the coefficient of total debts to equity (lev1) and total assets to equity (lev2) are positive as anticipated in the banking network of Iran. The paper uses data from 31 Iranian banks’ annual databases during the course of 2006-13 in order to estimate an empiri...

in this paper, i investigated the determinants of financial development with emphasis on social capital. first, i explain the relationship between financial development and its determinants, then estimate the model with gregory–hansen (1996) and johansen-juselious cointegration techniques in i.r. of iran (1971-2006). the results showed that, inflation and decline in social capital and weak prop...

Measuring the sensitivity of housing demand to mortgage rates and available leverage is challenging because there generally no exogenous variation in these variables. This paper circumvents this issue by designing a strategic survey which respondents report their willingness pay (WTP) for home under different financing scenarios. Relaxation down payment constraints or an increase nonhousing wea...

U.S. commercial banks are increasingly using credit scoring models to underwrite small business credits. This paper discusses this technology, evaluates the research findings on the effects of this technology on small business credit availability, and links these findings to a number of research and public policy issues. JEL classification: G21, G28, G34, L23

This note shows that oligopolistic loan competition with discriminatory pricing is inefficient when competing banks differ in their ability to screen borrowers: banks with better screening abilities win too small market shares. This result contrasts with a finding by Spence (1976) who showed that an oligopoly with price discrimination achieves first–best efficiency. JEL classification: D43; D82...

Custodians play a key but discrete role in the global financial market infrastructure. In Europe, they are licensed as “credit institutions ”, legal requirement for European deposit-taking institutions, and therefore face same prudential requirements “traditional” banks. However, their business model risk profile different from those of traditional banks since core activity does not encompass b...

Credit spreads display occasional spikes and are more strongly countercyclical in times of elevated financial stress. Financial crises extreme cases this nonlinear behavior, featuring skyrocketing credit spreads, sharp losses bank equity, deep recessions. We develop estimate a macroeconomic model with banking sector which banks’ leverage constraints occasionally binding equity issuance is endog...

Utilizing finance conceptual framework, this paper applies a Frontier-Volatility analysis to illuminate regulatory policies effects on volatility under Iranian Banking Prudential Framework over the period 2003 to 2015 using the raw database collected, classified and compiled by the Rahavard Novin Co. version 3, Securities and Stock Exchange Organization. Findings portray that volatility is affe...