Browsing by Author "Vauhkonen, Jukka"

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  • Vauhkonen, Jukka (2012)
    Bank of Finland. Financial market report 1
    The Ministry of Finance has set up a working group to consider how systemic risks threatening the stability of the financial system and the economy as a whole could be identified and prevented. The work is guided, for example, by the principles adopted in the Government programme and the recommendations issued by the European Systemic Risk Board on national macroprudential arrangements.
  • Vauhkonen, Jukka (2012)
    Bank of Finland. Financial market report 2
    The recommendations of the Basel Committee on Banking Supervision provide authorities with a high degree of discretion in the identification of domestic systemically important banks and in setting the capital buffers required of them.
  • Vauhkonen, Jukka (2003)
    Suomen Pankin keskustelualoitteita 28/2003
    Many adverse selection models of standard one-period debt contracts are based on the following seemingly innocuous assumptions.First, entrepreneurs have private information about the quality of their return distributions.Second, return distributions are ordered by the monotone likelihood-ratio property.Third, financiers payoff functions are restricted to be monotonically non-decreasing in firm profits.Fourth, financial markets are competitive.We argue that debt is not an optimal contract in these models if there is only one (monopoly) financier rather than an infinite number of competitive financiers.
  • Vauhkonen, Jukka (2010)
    Suomen Pankki. Rahoitusmarkkinaraportti 2
    Useat Euroopan maat ovat rahoituskriisin kokemusten seurauksena rajoittaneet tai aikeissa rajoittaa arvopapereiden lyhyeksimyyntiä. Lyhyeksimyynnin suorien rajoitusten hyödyistä ei kuitenkaan ole juuri empiiristä näyttöä.
  • Jokivuolle, Esa; Pylkkönen, Pertti; Vauhkonen, Jukka (2004)
    Suomen Pankki. Rahoitusmarkkinaraportti 2
    Suurin osa EU:n rahoituspalvelujen yhdentymisen toimintasuunnitelmasta on toteutunut, mutta tärkeitä hankkeita on myös edelleen kesken. Toimenpiteiden kansallinen implementointi on osin vasta alussa. Komissio päättää toimintasuunnitelman jatkotoimista vuonna 2005. Tämän artikkelin yhteydessä olevassa kehikossa esitellään lisäksi globaalin rahoitus-järjestelmän kannalta keskeisen elimen, Financial Stability Forumin, toimintaa.
  • Vauhkonen, Jukka (2009)
    Bank of Finland Research Discussion Papers 29/2009
    Published in Journal of Financial Services Research, Volume 41, Numbers 1-2, 2012: 37-49
    We consider the impact of mandatory information disclosure on bank safety in a spatial model of banking competition in which a bank s probability of success depends on the quality of its risk measurement and management systems. Under Basel II capital requirements, this quality is either fully or partially disclosed to market participants by the Pillar 3 disclosures. We show that, under stringent Pillar 3 disclosure requirements, banks equilibrium probability of success and total welfare may be higher under a simple Basel II standardized approach than under the more sophisticated internal ratings-based (IRB) approach.
  • Miettinen, Paavo; Saada, Adam; Tiililä, Nea; Vauhkonen, Jukka (2020)
    Bank of Finland. Bulletin 2/2020
    Stricter capital requirements since the global financial crisis have improved the ability of banks to lend and absorb losses in a crisis situation like the coronavirus pandemic. A robust lending capacity is now needed to finance fundamentally sound Finnish companies with liquidity needs. It must be ensured that banks are well-capitalised to withstand future loan losses.
  • Vauhkonen, Jukka (2003)
    Suomen Pankin keskustelualoitteita 13/2003
    In most countries, banks' equity holdings in firms that borrow from then are rather small.In light of the theoretical literature, this is somewhat surprising.For example, according to agency cost models, allowing banks to hold equity would seem to alleviate firms' asset substitution moral hazard problem associated with debt financing.This idea is formalised in John, John, and Saunders in a model where banks are modeled as passive investors and bank loans are the only source of outside finance for firms.In this paper, we argue that this alleged benefit of banks' equity holding is small or non-existent when banks are modeled explicitly as active monitors and firms have access also to market finance.Key words: banks' equity holdings, firms' capital structure, social welfare JEL classification numbers: D82, G32
  • Vauhkonen, Jukka (2010)
    Bank of Finland. Financial market report 3
    Banks are required to have significantly more equity capital and other higher-quality regulatory capital in future. An additional capital requirement may be imposed on systemically important banks
  • Vauhkonen, Jukka (2006)
    Suomen Pankki. Rahoitusmarkkinaraportti 1
    EU:n vakavaraisuusdirektiivi antaa monessa maassa toimivan pankkiryhmän ryhmätason valvojalle vahvemman aseman kuin Baselin pankkivalvontakomitean vakavaraisuussuositus Basel II.
  • Vauhkonen, Jukka (2010)
    EURO & TALOUS 3
    Baselin pankkivalvontakomitean valmisteleman laajan kokonaisuudistuksen tavoite on korjata finanssikriisin paljastamia vakavia puutteita pankkien sääntelyssä. Pankeilta vaaditaan vastaisuudessa huomattavasti nykyistä enemmän korkealaatuisia omia varoja suojaamaan pankkeja ja veronmaksajia pankkien tappioilta. Pankeille asetetaan myös uusia pääomapuskuri- ja maksuvalmiusvaatimuksia. Pankkien velkaantumista rajoitetaan uudella vaatimuksella vähimmäisomavaraisuusasteesta.
  • Vauhkonen, Jukka (2010)
    Suomen Pankki. Rahoitusmarkkinaraportti 3
    Pankeilta vaaditaan vastaisuudessa merkittävästi nykyistä enemmän osakepääomaa ja muita korkealaatuisimpia omia varoja. Systeemisesti merkittäville pankeille saatetaan asettaa vielä lisäpääomavaatimus.
  • Vauhkonen, Jukka (2005)
    Bank of Finland. Financial market report 2
    The narrowing of interest rate spreads between high- and low-risk bonds has been one of the clearest trends in the international bond markets in recent years. But interest rate spreads widened, at least temporarily, in the spring, triggered by the problems of American auto manufacturers Ford and General Motors.
  • Vauhkonen, Jukka (2008)
    Bank of Finland. Financial market report 2
    The Committee of European Securities Regulators (CESR) recommends to the European Commission that a new body be formed to develop standards for the operations of credit rating agencies and to monitor compliance with the standards.
  • Savolainen, Eero; Vauhkonen, Jukka (2015)
    Bank of Finland. Bulletin 2/2015
    The consequences of a banking crisis could be exceptionally severe in Finland’s concentrated banking system. Regulatory means must therefore be deployed to ensure the capital adequacy and liquidity of Finnish banks remain strong under all circumstances.
  • Kauko, Karlo; Savolainen, Eero; Tuomikoski, Olli; Vauhkonen, Jukka (2019)
    Bank of Finland. Bulletin 2/2019
    The Finnish corporate loan stock has grown in recent years. Corporate loans are riskier than household loans, yet the default rates on corporate lending have almost returned to the levels prevailing before the financial crisis.
  • Vauhkonen, Jukka (2004)
    Bank of Finland. Financial market report 3
    In early summer, modest US growth, interest rate and inflation expectations turned US bond yields to a decline, with European bond yields following suit. Interest rate differ-entials for corporate loans relative to government loans have been very low.
  • Vauhkonen, Jukka (2011)
    Bank of Finland. Financial market report 2
    The European Commission's proposal for a Capital Requirements Directive and Regulation may restrict authorities' ability to ward off risks to financial stability.
  • Vauhkonen, Jukka (2004)
    Suomen Pankki. E 30
    This thesis consists of an introductory chapter and four essays on financial contracting theory.In the first essay, we argue that many adverse selection models of standard one-period loan contracts are not robust to changes in market structure.We argue that debt is not an optimal contract in these models, if there is only one (monopoly) financier instead of a large number of competitive financiers. In the second essay, we examine the welfare effects of allowing banks to hold equity in their borrowing firms.According to the agency cost literature, banks equity stakes in their borrowing firms would seem to alleviate firms asset substitution moral hazard problem associated with debt financing.We argue that this alleged benefit of banks equity holding is small or non-existent when banks are explicitly modelled as active monitors and firms have access also to market finance. In the third essay, we extend the well-known incomplete contracting model of Aghion and Bolton to attempt to explain the empirical observation that the allocation of control rights between entrepreneur and venture capitalist is often contingent in the following way.If the company s performance (eg earnings before taxes and interest) is bad, the venture capital firm obtains full control of the company.If company performance is medium, the entrepreneur retains or obtains more control rights.If company performance is good, the venture capitalist relinquishes most of his control rights. The fourth essay is a short note, in which we show that the main result of the model of Aghion and Bolton concerning optimality properties of contingent control allocations in an incomplete contracting environment holds only if an additional condition is satisfied. Key words: financial contracts, security design, capital structure, incomplete contracts
  • Alhonsuo, Sampo; Vauhkonen, Jukka (2006)
    Suomen Pankki. Rahoitusmarkkinaraportti 4
    Euroopan pankkitoimialan yksi viimeisen vuosikymmenen tärkeimmistä trendeistä, pankkien ja niiden konttoreiden määrän voimakas supistuminen, näyttää useissa EU-maissa olevan ohi.