Browsing by Subject "G2"

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  • Mäkinen, Mikko; Solanko, Laura (2018)
    Russian Journal of Money and Finance 2 ; 2018
    This study examines the role of levels and changes in bank balance sheet variables in explaining bank closure. Using a unique set of monthly bank-level panel data from Russia, we estimate determinants of bank license withdrawals during 2013M7-2017M7. We make two key findings. First, changes in CAMEL indicators are always significantly correlated with probability of bank closure, and the magnitude of parameter estimates decreases with the lag length. Second, while the one-month lagged levels of capital, earnings, and liquidity are significantly associated with the probability of bank closure in the subsequent month, the level of liquidity is the only significant indicator for longer lags. Our key contribution that changes in CAMEL variables matter more than levels is robust to various robustness checks.
  • Herrala, Risto (2012)
    Suomen Pankki. E 48
    Chapter 1 Introduction 11 Chapter 2 Reserve pools 23 Chapter 3 Public intervention and financial crises: an empirical study 43 Chapter 4 Credit conditions and durable consumption: evidence of a strong link 67 Chapter 5 The influence of bank ownership on credit supply: evidence from Russia's recent financial crisis 89 Chapter 6 Conclusions 109
  • Buchanan, Bonnie G. (2016)
    Bank of Finland Research Discussion Papers 31/2016
    Published in Journal of Business Ethics, October 2016, Volume 138, Issue 3: 559–577
    Securitization is considered to be one of the biggest financial innovations of the last century. It is also regarded as both a catalyst and solution to the 2008 financial crisis. Once a popular method of financing the mortgage and consumer credit markets, aspects of the global securitization market are now struggling to revive. In this paper I discuss the role that ethics played in securitization prior to the 2008 financial crisis and find that it is not an obvious story of moral failures, but rather that it lies in more subtle elements of the financial system. The ethics uncertainty role in the securitization story is one of flawed incentives and the shifting of responsibility for handling risk. The role of securitization and the ethics of risk transfer have rarely been discussed explicitly in the literature. The historical origins of securitization and lessons learned from previous flawed uses of the process are also provided. I also detail the various global institutional reform proposals that have taken place. Moving forward, it is crucial to understand the causes, consequences and ethical implications of securitization in the financial crisis so as to help individuals and managers better assess risk, align incentives and design appropriate policy responses.
  • Francis, Bill B.; Hasan, Iftekhar; Kostova, Gergana L. (2016)
    Bank of Finland Research Discussion Papers 8/2016
    Published in Journal of International Money and Finance Volume 69, December 2016, Pages 364–389
    We assess the importance of industry peers for a firm’s own decision making strategy, using a rich sample of data covering 47 countries and 87 different industries between 1990 and 2011. Following the instrumental variable approach suggested by Leary and Roberts (2014), we find that, similar to U.S. firms, foreign firms do follow their peers when they make financial policy decisions. A standard deviation increase in peer firms’ average leverage leads to about 5 percentage points increase in a firm’s own leverage. We also find evidence that firms are more likely to follow their peers when investor protection laws including information disclosure and minority shareholder protection are weak, when creditor rights laws are strong, and when equity markets are more developed, suggesting that peers matter the most when firms have the greatest need to learn and to demonstrate their quality. These results hold even when we perform the analysis on a matched sample of firms.