Showing papers in "Journal of Financial Stability in 2018"

TL;DR: This article reviewed empirical studies on Islamic banking and concentrates on their main findings while highlighting future research directions, and discusses scholars' concerns that have led to a paradigm shift in the system and highlight practitioners' disquiet about recent practices.

TL;DR: The authors examined the effect of economic policy uncertainty on the relation between investment and the cost of capital and found that an increase in policy uncertainty reduces the investment-cost of capital sensitivity for firms operating in industries that depend strongly on government subsidies and government consumption as well as in countries with high state ownership.

TL;DR: In this article, the authors developed a measure of bank interconnectedness using syndicated corporate loan portfolios, overlap based on industry and region, and different weights such as equal weights, size and relationships.

TL;DR: In this paper, the authors examined how the institutional environment affects the relationship between bank capital and system-wide fragility and found that bank capital is associated with a reduction in the systemic risk contribution of individual banks.

TL;DR: In this paper, the authors discuss new research pathways to address the challenging questions still open, including multiplex networks, big financial data, and climate-finance, and discuss new fundamental scientific understanding of the emergence systemic risk and concrete applications to the policy areas of financial stability and macro-prudential policy.

TL;DR: In this paper, the impact of capital and liquidity on bank-lending-growth following the 2008 financial crisis, and the new measures inspired by the Basel III regulatory framework was analyzed.

TL;DR: This article showed that the revised loan loss provisioning based on the International Financial Reporting Standards (IFRS) and the US Generally Accepted Accounting Principles (GAAP) implies a reduction of Tier 1 capital.

TL;DR: In this article, Hong et al. defined and constructed Granger-causality tail risk networks between 33 systemically important banks (SIBs) and 36 sovereign bonds worldwide to identify periods of distress in financial markets and possible channels of systemic risk propagation.

TL;DR: In this paper, an extensive review of the evidence related to the 2007-09 crisis reveals that it was an insolvency risk crisis, not a liquidity crisis, and appropriate post-crisis regulatory reform should therefore focus on increasing capital requirements.

TL;DR: In this article, the marginal benefits and costs of increasing the regulatory minimum bank equity-to-asset "leverage ratio" from 4 to 15 percent were investigated, and it was shown that the benefits equal costs at 19 percent.

TL;DR: The authors investigated how the political connections of government bank CEOs affected their banks' performance during the 2007-2009 financial crisis and found that government banks with politically connected CEOs experienced significantly higher loan default rates and worse operating performance than those without political connected CEOs.

TL;DR: In this article, the authors analyzed the link between banking sector quality and sovereign risk in the whole European Union over 1999-2014 and showed that a higher proportion of non-performing loans is the single most influential sector-specific variable that is associated with increased sovereign risk.

TL;DR: In this article, the authors assess the impact of typical macro-prudential policy interventions on house price and household credit growth in up to 19 OECD countries, using three datasets from the IMF and BIS.

TL;DR: In this article, the authors compare the empirical features of financial and business cycles of 13 European Union countries, and discuss candidate theoretical mechanisms which could explain these differences, showing that financial cycles have a higher amplitude, a longer duration and exhibit far greater symmetry.

TL;DR: This article studied the sensitivity of banks' credit supply to small and medium-size enterprises (SMEs) in the UK with respect to the banks' financial condition before and during the financial crisis.

TL;DR: In this article, the authors examine interest rate pass-through in the euro area over the 2008-2016 period and investigate the effects of financial market fragmentation, European Central Bank balance sheet policies and negative rates on the nature of passthrough.

TL;DR: This paper examined the financial market impact of intermeeting communication of the members of the European Central Bank's Governing Council (GC) using high frequency data between July 2008 and January 2014.

TL;DR: In this article, the authors test whether domain specific CSR portfolios present pricing anomalies that could be captured by the introduction of risk factors accounting for exposition to stakeholder risk, and this risk source is priced in the cross-section of stock returns.

TL;DR: This article examined the effect of competition and business cycles on bank capital buffers around the world and found that more competition leads to higher buffers in developed countries but to lower buffers in developing ones.

TL;DR: In this article, the authors examined the lending patterns in Turkish Islamic banking over business cycles and found that Islamic banks in Turkey exhibit a procyclical lending pattern, similar to conventional banks.

TL;DR: In this article, the authors measure systemic risk in the network of financial market infrastructures (FMIs) as the probability that two or more FMIs have a large credit risk exposure to a common FMI participant.

TL;DR: The authors analyzed the impact of geographic diversification on bank value by employing a data set comprising the largest banks across the world, originating from both developed and emerging countries, and found that the value impact of international diversification depends on the financial development level of a bank's home country.

TL;DR: In this paper, the authors consider the effectiveness of unit root exuberance tests in predicting banking crises, using a sample of 15 EU countries over the past three decades, their crisis dating follows the scheme of the European Systemic Risk Board.

TL;DR: In this paper, the authors studied the reaction of selected CEE currencies to increased financial stress in the euro area (core) and also in global financial markets, and suggested that this reaction might be non-linear; the safe haven status of a satellite currency may hold in calm periods, but breaks down when risk aversion is elevated.

TL;DR: In this article, the authors find that multi-bank holding companies (MBHCs) in the U.S. have lower insolvency risk than single bank holding company (SBHC) at the parent level, but have significantly higher insolvencies risk than the latter at the subsidiary level.

TL;DR: In this paper, the authors examine whether inside debt induces CEOs to pursue less risky acquisitions and show that acquisitions announced by CEOs with high inside debt incentives are associated with a wealth transfer from equity to debt holders.

TL;DR: In this article, the authors investigate how shocks to the reputation of credit rating agencies and the subsequent introduction of stricter regulation affect investors' reaction to rating signals and find that market investors conclude that ratings are generally overstated and infer greater negative information from downgrades, and that the introduction of new regulatory measures such as SOX Act, the CRA Reform Act and the Dodd-Frank Act seems instead to improve rating quality and soften investors' response.

TL;DR: In this article, the authors build a two-country macroeconomic model with banking sectors that are owned by residents of one (big and foreign) country and check how foreign ownership of banks affects transmission of domestic shocks to find that it has a stabilizing effect.

TL;DR: In this paper, the authors test whether new issuers on the European corporate bond markets experience a change in their interest rate sensitivity upon their bond issuance and find that stock returns have become significantly less sensitive to interest rate fluctuations for firms that enter the publicly traded bond market.

TL;DR: In this paper, a matched dataset of Japanese banks and firms was used to examine how bank-driven terminations of bank-borrower relationships affect the investments of the borrowers, and they found that such terminations significantly decrease investment, exerting an effect that exceeds that due to credit reductions within continuing relationships.