We investigate the effectiveness of Bank Recovery and Resolution Directive (BRRD) in mitigating bank-sovereign nexus Euro Area. Using CDS spreads to measure bank sovereign credit risk a DCC-MIDAS model capturing long-term component interconnectedness, we document that dynamic correlation between banks sovereigns has decreased Area countries since introduction BRRD. Panel data analysis reveals d...

The problems of the Chinese financial system, and particularly of its banks, have been well known. Since the reform era began in 1978, steady progress has been made in transforming the financial system, despite which some core problems of the financial system remain unresolved:1 The financial system is unbalanced and underdeveloped. The securities markets are dwarfed by a banking system that is...

Monetary policy transmission may be impaired if banks rebalance their portfolios toward securities. We identify the bank lending and risk-taking channels of monetary by exploiting—Italy's unique—credit security registers. In crisis times, with higher central liquidity, less capitalized react increasing securities over credit supply, inducing worse firm-level real effects. However, they buy lowe...

In general, companies in operations use funds sourced from debt, own capital, or theresults of investment/financing outside parties. Likewise, Islamic banks theiroperations also these sources funds. Selection alternative fundsused can affect the level company profitability as measured by profit. This studyaims to determine whether there is an effect originating bankdebt (liability banks), secur...

This paper investigates the role of public debt in financial development an emerging market namely, Jordan. Based on previous empirical research, we test prediction two hypotheses for debt: “safe asset” vs “lazy banks”. Using annual data over period 2008 to 2018 and using Fixed Effect (FE) Bias Correction Effects (BCFE) methodologies that control both unobservable banks specific time-specific v...

Financial institutions play a key role as credit providers in the economy, and liquidity crises arise when they become credit constrained themselves. In such liquidity crises, financial institutions’ ability to borrow against their securities plays a key role, as Bagehot points out. In the private markets, it can become virtually impossible to borrow against certain illiquid securities, and, mo...

The Eurosystem's Public Sector Purchase Programme (PSPP) increased the scarcity of safe assets, which caused significant declines and substantial dispersion in European repo rates. However, banks holding these assets benefited from this development: First, using German security register, paper shows that affects bank funding costs, as their collateral supply is determined by ex ante securities ...

We analyze the transmission effects of monetary policy in a general equilibrium model of the financial sector, with bank lending and securities markets. Bank lending is constrained by capital adequacy requirements, and asymmetric information adds a cost to outside bank equity capital. In our model, monetary policy does not affect bank lending through changes in bank liquidity; rather, it operat...

This paper discusses the possible uses of survivor swaps as instruments for managing, hedging and trading mortality-dependent risks. Survivor swaps are attractive instruments for insurance companies that need to manage their mortality risks, but also offer banks, securities firms, hedge funds and other interested parties an easy avenue into the acquisition of mortality risk exposure. The paper ...