Credit Intermediation And The Macroeconomy

Author : Sudipto Bhattacharya,Willem Alexander Boot,Anjan V. Thakor
Publisher : Unknown
Page : 934 pages
File Size : 53,7 Mb
Release : 2004
Category : Credit
ISBN : 0199243069

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Credit, Intermediation, and the Macroeconomy by Sudipto Bhattacharya,Willem Alexander Boot,Anjan V. Thakor Pdf

Developments in theories of financial markets and institutions, using the tools of the economics of uncertainty and of contracts, as well as results in game theory, have, over the last two decades, constituted an exciting and burgeoning field of research. This collection of readings drawstogether highlights of the 'second generation' literature in this area, emphasizing the theoretical, institutional, and policy-oriented regulatory implications of some of the key modelling techniques in the field.The collection divides into seven sections covering the monitoring role of banks and other intermediaries; liquidity demand and the role of banks and the government; bank runs and financial crises; bank regulation; inter-bank competition and bank--firm relationships; comparative financial systems;and imperfect credit markets and the macroeconomy. Each section comprises four articles previously published in top-ranking economics and finance journals, plus a discussion by a prominent scholar, who provides a synthesis and critique of the literature, and suggests promising directions for futureresearch and application of results.

Author : Harold L. Cole
Publisher : Oxford University Press
Page : 304 pages
File Size : 45,8 Mb
Release : 2019-03-29
Category : Business & Economics
ISBN : 9780190941727

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Finance and Financial Intermediation by Harold L. Cole Pdf

The financial system is a densely interconnected network of financial intermediaries, facilitators, and markets that serves three major purposes: allocating capital, sharing risks, and facilitating intertemporal trade. Asset prices are an important mechanism in each of these phenomena. Capital allocation, whether through loans or other forms of investment, can vary both across sectors-at the broadest, manufactures, agriculture, and services-and within sectors, for example different firms. The risk that various investors are willing to take reflects their financial position and alternative opportunities. Risk and asset allocation are also influenced by whether money, and especially its expenditure, is more important now or in the future. These decisions are all influenced by governmental policies. When there are mismatches, the results include financial meltdowns, fiscal deficits, sovereign debt, default and debt crises. Harold L. Cole provides a broad overview of the financial system and assets pricing, covering history, institutional detail, and theory. The book begins with an overview of financial markets and their operation and then covers asset pricing for standard assets and derivatives, and analyzes what modern finance says about firm behavior and capital structure. It then examines theories of money, exchange rates, electronic payments methods, and cryptocurrencies. After exploring banks and other forms of financial intermediation, the book examines the role they played in the Great Recession. Having provided an overview of the provate sector, Cole switches to public finance and government borrowing as well as the incentives to monetize the public debt and its consequences. The book closes with an examination of sovereign debt crises and an analysis of their various forms. Finance and financial intermediation are central to modern economies. This book covers all of the material a sophisticated economist needs to know about this area.

Author : Thorvardur T. Olafsson
Publisher : International Monetary Fund
Page : 50 pages
File Size : 48,5 Mb
Release : 2018-09-11
Category : Business & Economics
ISBN : 9781484373354

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Cross-Border Credit Intermediation and Domestic Liquidity Provision in a Small Open Economy by Thorvardur T. Olafsson Pdf

This paper develops a small open economy model where global and domestic liquidity is intermediated to the corporate sector through two financial processes. Investment banks intermediate cross-border credit through interlinked debt contracts to entrepreneurs and commercial banks intermediate domestic savings to liquidity constrained final good producers. Both processes are needed to facilitate development of key production inputs. The model captures procyclical investment bank leverage dynamics, global liquidity spillovers, domestic money market pressures, and macrofinancial linkages through which shocks propagate across the two processes, affecting spreads and balance sheets, as well as the real economy through investment and working capital channels.

Author : Marco Mazzoli
Publisher : Cambridge University Press
Page : 231 pages
File Size : 55,7 Mb
Release : 1998-01-22
Category : Business & Economics
ISBN : 9780521584111

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Credit, Investments and the Macroeconomy by Marco Mazzoli Pdf

This book relates the literatures of finance, industrial economics and investment to the theoretical framework of the 'credit view'. Firstly it is assumed that banks' decisions concerning their assets are seen as at least as relevant as their decisions concerning their liabilities. Secondly, securities and bank credit are considered to be highly imperfect substitutes. In this regard it is important to investigate the way industrial and financial sectors interact. In particular, how is the macroeconomy affected by the phenomenon of 'securitization' and by exogenous changes in the industrial structure of the credit market. The interactions between real and financial sectors are also analysed from the point of view of the industrial firm, in a model where the investment and financial decisions of the firm are taken simultaneously.

Author : Mr.Philipp C. Rother
Publisher : International Monetary Fund
Page : 33 pages
File Size : 42,9 Mb
Release : 1999-03-01
Category : Business & Economics
ISBN : 9781451845433

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Explaining the Behavior of Financial Intermediation by Mr.Philipp C. Rother Pdf

This paper investigates the effects of macroeconomic and structural variables on financial intermediation. To this end, it presents a theoretical foundation for two new measures of intermediation, the money multiplier and the ratio of private sector credit to monetary base. Results from panel estimations covering 19 transition economies indicate that policy makers need to address in particular the problems of bad loans on bank balance sheets and high market concentration while maintaining a stable macroeconomic environment. Further variables, such as minimum reserve requirements and the capital adequacy ratio, are found to possess less explanatory power.

Author : Todd A. Knoop
Publisher : Wiley-Blackwell
Page : 296 pages
File Size : 40,5 Mb
Release : 2008-04-07
Category : Business & Economics
ISBN : STANFORD:36105131706504

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Modern Financial Macroeconomics by Todd A. Knoop Pdf

Modern Financial Macroeconomics takes a non-technical approach in examining the role that financial markets and institutions play in shaping outcomes in the modern macro economy. Reviews historical and contemporary macroeconomic theory Examines governmental influence on moderating (or exacerbating) economic fluctuations Discusses both empirical and theoretical links between financial systems and economic performance, as well as case studies detailing the role of finance in specific business cycle episodes

Author : Charles R. Hulten,Marshall B. Reinsdorf
Publisher : University of Chicago Press
Page : 398 pages
File Size : 41,8 Mb
Release : 2015-02-05
Category : Business & Economics
ISBN : 9780226204260

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Measuring Wealth and Financial Intermediation and Their Links to the Real Economy by Charles R. Hulten,Marshall B. Reinsdorf Pdf

More than half a decade has passed since the bursting of the housing bubble and the collapse of Lehman Brothers. In retrospect, what is surprising is that these events and their consequences came as such a surprise. What was it that prevented most of the world from recognizing the impending crisis and, looking ahead, what needs to be done to prevent something similar? Measuring Wealth and Financial Intermediation and Their Links to the Real Economy identifies measurement problems associated with the financial crisis and improvements in measurement that may prevent future crises, taking account of the dynamism of the financial marketplace in which measures that once worked well become misleading. In addition to advances in measuring financial activity, the contributors also investigate the effects of the crisis on households and nonfinancial businesses. They show that households’ experiences varied greatly and some even experienced gains in wealth, while nonfinancial businesses’ lack of access to credit in the recession may have been a more important factor than the effects of policies stimulating demand.

Author : Alexander Herman,Ms.Deniz Igan,Mr.Juan Sole
Publisher : International Monetary Fund
Page : 41 pages
File Size : 44,5 Mb
Release : 2015-06-30
Category : Business & Economics
ISBN : 9781513516448

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The Macroeconomic Relevance of Credit Flows by Alexander Herman,Ms.Deniz Igan,Mr.Juan Sole Pdf

This paper exploits the Financial Accounts of the United States to derive long time series of bank and nonbank credit to different sectors, and to examine the cyclical behavior of these series in relation to (i) the long-term business cycle, (ii) recessions and recoveries, and (iii) systemic financial crises. We find that bank and nonbank credit exhibit different dynamics throughout the business cycle. This diverging cyclical behavior of output and bank and nonbank credit argues for placing greater emphasis on sector-specific macroprudential measures to contain risks to the financial system, rather than using interest rates to address any vulnerabilities. Finally, we examine the role of bank and nonbank credit in the creation of financial interconnections and illustrate a method to conduct macro-financial stability assessments.

Author : Mr.Tigran Poghosyan
Publisher : International Monetary Fund
Page : 54 pages
File Size : 49,8 Mb
Release : 2012-05-01
Category : Business & Economics
ISBN : 9781475564136

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Financial Intermediation Costs in Low-Income Countries by Mr.Tigran Poghosyan Pdf

We analyze factors driving persistently higher financial intermediation costs in low-income countries (LICs) relative to emerging market (EMs) country comparators. Using the net interest margin as a proxy for financial intermediation costs at the bank level, we find that within LICs a substantial part of the variation in interest margins can be explained by bank-specific factors: margins tend to increase with higher riskiness of credit portfolio, lower bank capitalization, and smaller bank size. Overall, we find that concentrated market structures and lack of competition in LICs banking systems and institutional weaknesses constitute the key impediments preventing financial intermediation costs from declining. Our results provide strong evidence that policies aimed at fostering banking competition and strengthening institutional frameworks can reduce intermediation costs in LICs.

Author : Zhaohui Chen,Mr.Jorge A. Chan-Lau
Publisher : International Monetary Fund
Page : 25 pages
File Size : 55,5 Mb
Release : 1998-09-01
Category : Business & Economics
ISBN : 9781451935998

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Financial Crisis and Credit Crunch as a Result of Inefficient Financial Intermediation—with Reference to the Asian Financial Crisis by Zhaohui Chen,Mr.Jorge A. Chan-Lau Pdf

This paper develops a model of private debt financing under inefficient financial intermediation. It suggests a mechanism that can generate the following sequence of events observed in the recent Asian crisis: A period of relatively low capital flow despite a steady improvement in economic fundamentals (capital inflow inertia), followed by a fast buildup of capital inflow, and ended with a large capital outflow and domestic credit crunch. Unlike other models requiring large movements in fundamentals or asset prices to explain a financial crisis, this model can exhibit large credit/capital flow swings with moderate changes in the economic and market environment.

Author : Philipp Constantin Rother,International Monetary Fund. Monetary and Exchange Affairs Department
Publisher : Unknown
Page : 32 pages
File Size : 44,9 Mb
Release : 2003
Category : Electronic
ISBN : OCLC:498800607

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Explaining the Behavior of Financial Intermediation by Philipp Constantin Rother,International Monetary Fund. Monetary and Exchange Affairs Department Pdf

Author : Philipp Rother
Publisher : Unknown
Page : 32 pages
File Size : 54,8 Mb
Release : 2006
Category : Electronic
ISBN : OCLC:1291216187

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Explaining the Behavior of Financial Intermediation by Philipp Rother Pdf

This paper investigates the effects of macroeconomic and structural variables on financial intermediation. To this end, it presents a theoretical foundation for two new measures of intermediation, the money multiplier and the ratio of private sector credit to monetary base. Results from panel estimations covering 19 transition economies indicate that policy makers need to address in particular the problems of bad loans on bank balance sheets and high market concentration while maintaining a stable macroeconomic environment. Further variables, such as minimum reserve requirements and the capital adequacy ratio, are found to possess less explanatory power.

Author : Martin Gächter,Martin Geiger,Sebastian Stöckl
Publisher : Unknown
Page : 128 pages
File Size : 43,8 Mb
Release : 2019
Category : Electronic
ISBN : OCLC:1162838848

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Credit Intermediation and the Transmission of Macrofinancial Uncertainty by Martin Gächter,Martin Geiger,Sebastian Stöckl Pdf

We examine the transmission of global macro-financial uncertainty to economic activity depending on the current state of the banking sector. Previous literature suggests that credit supply and uncertainty shocks are important drivers of economic activity, but the distinction between the two is empirically challenging. In this paper, we introduce a new, but surprisingly simple measure of macro-financial uncertainty at the global level while the state of credit intermediation is being captured on the country level. Macro-financial uncertainty generally exerts adverse effects on economic growth in a sample of advanced economies. We find, however, that a shock to uncertainty is strongly reinforced when credit intermediation is distressed. In addition, we show that both macroeconomic and financial market uncertainty are associated with lower economic activity, although the latter exerts stronger effects. State-dependency of the effects is prevalent in both cases. Our findings have important policy implications, highlighting both the state of the banking sector as well as the origin of uncertainty as crucial factors in the transmission of uncertainty.

Author : Fabrizio Mattesini
Publisher : Dartmouth Publishing Company
Page : 208 pages
File Size : 51,5 Mb
Release : 1993
Category : Capital market
ISBN : UOM:39015029250852

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Financial Markets, Asymmetric Information, and Macroeconomic Equilibrium by Fabrizio Mattesini Pdf

The study of the interaction between the financial sector and the sector of the economy is one of the most recent advances in macroeconomic theory. While mainstream economics assigns a passive role to the financial sector there is a growing body of literature which emphasizes the importance of financial intermediaries in explaining fluctuations and the determination of the process through which monetary policy impulses are transmitted to the rest of the economy. This literature has its origin in the models that rely on asymmetric information to explain imperfections in financial markts and in empirical evidence collected through various econometric techniques and through historical studies. This book surveys the relevant work ion the subject, evaluates the empirical evidence and the explanatory power of the theories proposed and furnishes new and empirical results.

Author : Tobias Adrian
Publisher : DIANE Publishing
Page : 35 pages
File Size : 47,6 Mb
Release : 2011
Category : Business & Economics
ISBN : 9781437930900

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Changing Nature of Financial Intermediation and the Financial Crisis of 2007-09 by Tobias Adrian Pdf

This is a print on demand edition of a hard to find publication. The financial crisis of 2007-09 highlighted the changing role of financial institutions and the growing importance of the ¿shadow banking system,¿ which grew out of the securitization of assets and the integration of banking with capital market developments. In a market-based financial system, banking and capital market developments are inseparable, and funding conditions are tied closely to fluctuations in the leverage of market-based financial intermediaries. This report describes the changing nature of financial intermediation in the market-based financial system, charts the course of the recent financial crisis, and outlines the policy responses that have been implemented by the Fed. Reserve and other central banks. Charts and tables.