Search results for " financial sector"
showing 3 items of 3 documents
Quantifying Structural Subsidy Values for Systemically Important Financial Institutions
2013
Abstract Claimants to Systemically Important Financial Institutions (SIFIs) would receive transfers when governments are forced into bailouts. Ex ante, this bailout expectation lowers SIFIs’ daily funding costs. The funding cost advantage reflects both the structural level of the government support and the time-varying market valuation for such a support. Based on a large worldwide sample of banks, we estimate the value of the structural subsidy, by exploiting expectations of state support embedded in credit ratings and by applying the long-run average value of the rating bonus. The value of the structural subsidy was already sizable, 60 basis points (bp), as of the end-2007, before the cri…
Financial Sector Reform After the Crisis: Has Anything Happened?
2013
We analyze the reactions of stock returns and CDS spreads of banks from Europe and the United States to four major regulatory reforms in the aftermath of the subprime crisis, employing an event study analysis. In contrast to the public perception that nothing has happened, we find that financial markets indeed reacted to the structural reforms enacted at the national level. All reforms succeeded in reducing bail-out expectations, especially for systemic banks. However, banks' profitability was also affected, showing up in lower equity returns. The strongest effects were found for the Dodd-Frank Act (especially the Volcker rule), whereas market reactions to the German restructuring law were …
The Political Economy of the World Bank. The Early Years
2009
This book covers the early years of the International Bank of Reconstruction and Development (IBRD), commonly known as the World Bank when it first confronted the issue of development as a fundamental part of its mission. The book is mainly concerned with how the Bank interpreted its mission and, more specifically, how its mission was born: what events shaped it, what cultural and ideological background influenced it and what was the historical context in which it arose. So this book is a contribution to the study of the prehistory of development, understood in its social and economic context. In this respect, the study of the early years of the World Bank offers excellent context for obser…