Author: Jefferson Duarte Publisher: ISBN: Category : Languages : en Pages : 44
Book Description
We empirically test for the presence of two types of financial contagion across large broker-dealers and dealer banks during the crisis of 2007-2009: the type based on the idea that market illiquidity mediates the spread of distress from one dealer to others, or, “liquidity contagion”, and the type based on the idea that one dealer's distress directly undermines the franchise value of others, or, “franchise value contagion”. We test for the two types of contagion against the null hypothesis that correlation in dealer-distress during the crisis was only due to an observable common shock to the real estate assets that triggered the crisis. We find evidence that prior to the Federal Reserve and Treasury market interventions in the Fall of 2008, both types of contagion were present. Franchise-value contagion, however, dominates, accounting for 95% of all contagion. Furthermore, unlike liquidity contagion which disappears after the interventions are in place, franchise-value contagion remains.
Author: Darrell Duffie Publisher: ISBN: Category : Bank failures Languages : en Pages : 46
Book Description
I explain the key failure mechanics of large dealer banks, and some policy implications. This is not a review of the financial crisis of 2007-2009. Systemic risk is considered only in passing. Both the financial crisis and the systemic importance of large dealer banks are nevertheless obvious and important motivations.
Author: Darrell Duffie Publisher: Princeton University Press ISBN: 1400836999 Category : Business & Economics Languages : en Pages : 108
Book Description
A leading finance expert explains how and why big banks fail—and what can be done to prevent it Dealer banks—that is, large banks that deal in securities and derivatives, such as J. P. Morgan and Goldman Sachs—are of a size and complexity that sharply distinguish them from typical commercial banks. When they fail, as we saw in the global financial crisis, they pose significant risks to our financial system and the world economy. How Big Banks Fail and What to Do about It examines how these banks collapse and how we can prevent the need to bail them out. In sharp, clinical detail, Darrell Duffie walks readers step-by-step through the mechanics of large-bank failures. He identifies where the cracks first appear when a dealer bank is weakened by severe trading losses, and demonstrates how the bank's relationships with its customers and business partners abruptly change when its solvency is threatened. As others seek to reduce their exposure to the dealer bank, the bank is forced to signal its strength by using up its slim stock of remaining liquid capital. Duffie shows how the key mechanisms in a dealer bank's collapse—such as Lehman Brothers' failure in 2008—derive from special institutional frameworks and regulations that influence the flight of short-term secured creditors, hedge-fund clients, derivatives counterparties, and most devastatingly, the loss of clearing and settlement services. How Big Banks Fail and What to Do about It reveals why today's regulatory and institutional frameworks for mitigating large-bank failures don't address the special risks to our financial system that are posed by dealer banks, and outlines the improvements in regulations and market institutions that are needed to address these systemic risks.
Author: United States. Congress. Senate. Committee on Banking, Housing, and Urban Affairs. Subcommittee on Securities Publisher: ISBN: Category : Banking law Languages : en Pages : 170
Author: United States. Congress. House. Committee on Government Operations. Commerce, Consumer, and Monetary Affairs Subcommittee Publisher: ISBN: Category : Brokers Languages : en Pages : 978
Author: George G. Kaufman Publisher: Elsevier ISBN: 9780762310807 Category : Business & Economics Languages : en Pages : 464
Book Description
Contains papers which consider the basic role of market discipline, how it may be applied to banking and more broadly to large financial institutions of various types.
Author: Darryl King Publisher: International Monetary Fund ISBN: 148430585X Category : Business & Economics Languages : en Pages : 50
Book Description
This paper considers the central bank mandate with respect to financial stability and identifies the links to the functioning of securities markets. It argues that while emergency support to securities markets is an important part of the crisis management response, a high bar should be set for its use. Importantly, it should be used only as part of a comprehensive policy package. The paper considers what types of securities markets may be important for financial stability, what market conditions could trigger emergency support measures, and how programs can be designed to restore market functioning while minimizing moral hazard.
Author: United States. Congress. House. Committee on Banking, Finance, and Urban Affairs. Subcommittee on Domestic Monetary Policy Publisher: ISBN: Category : Brokers Languages : en Pages : 486
Author: Jefferson Duarte
Author: Darrell Duffie
Author: Darrell Duffie
Author: United States. Congress. Senate. Committee on Banking, Housing, and Urban Affairs. Subcommittee on Securities
Author: United States. Congress. House. Committee on Government Operations. Commerce, Consumer, and Monetary Affairs Subcommittee
Author: Poser, Fanto, Gross
Author: George G. Kaufman
Author: Darryl King
Author: United States
Author: United States. Congress. House. Committee on Banking, Finance, and Urban Affairs. Subcommittee on Domestic Monetary Policy