The current nancial crisis motivates the study of correlated defaults in nancial systems. In this paper we focus on such a model which is based on Markov random elds. This is a probabilistic model where uncertainty in default probabilities incorporates expert's opinions on the default risk (based on various credit ratings). We consider a bilevel optimization model for nding an optimal recovery ...

There is wide debate over the causes and ultimate importance of the pecking order and debt conservatism to firm financing decisions. We argue that these empirical patterns are not driven solely by firmand market level variation, but are also linked to individual managerial characteristics. We relate the reluctance of (some) managers to access external capital markets, and particularly equity ma...

We argue that individual characteristics of managers can explain capital structure decisions like debt conservatism and pecking-order …nancing choices. Moreover, they can explain cross-sectional variation in these decisions despite identical …rm characteristics. We link the reluctance of (some) managers to access external capital markets, and in particular equity markets, to managerial overcon…...

in the recent economic literature, an important finding is the causal relationship between financial development and economic growth. before the 1970s, the most of economists believed that economic growth could be reached only by accumulation of physical capital. in the 1970s and after the pioneering works of mckinon (1973) and shaw (1973), this orthodox view was criticized by a vast amount of ...

The financial trilemma states that financial stability, financial integration and national financial policies are incompatible. Any two of the three objectives can be combined but not all three; one has to give. This paper develops a model to underpin the financial trilemma. Our findings for financial integration suggest that the financial trilemma is in particular at work in Europe. JEL codes:...