Search Results
Showing results 1 to 10 of approximately 49.
(refine search)
Working Paper
Competition and Bank Fragility
Journal Article
The Effect of risk and organizational structures on bank capital ratios
Capital holdings can help banks absorb unexpected losses and protect the financial system from costs associated with bank failures. As a result, a bank's capital ratio?the ratio of equity capital to total assets?can serve as an important benchmark for financial stability. Although banks are required to hold sufficient capital to meet regulatory minimums, they may have mixed incentives to hold capital in excess of these requirements. Rajdeep Sengupta and Eric W. Hogue examine how a bank's riskiness and organizational structure affect its capital holdings. They find that banks with higher risk ...
Journal Article
Prime and subprime hybrid mortgages
Although similar in many ways, subprime hybrids were really different from prime hybrids.
Working Paper
Did prepayments sustain the subprime market?
This paper demonstrates that the reason for widespread default of mortgages in the subprime market was a sudden reversal in the house price appreciation of the early 2000's. Using loan-level data on subprime mortgages, we observe that the majority of subprime loans were hybrid adjustable rate mortgages, designed to impose substantial financial burden on reset to the fully indexed rate. In a regime of rising house prices, a financially distressed borrower could avoid default by prepaying the loan and our results indicate that subprime mortgages originated between 1998 and 2005 had extremely ...
Journal Article
A closer look at house price indexes
At least early in the financial crisis, the high rate of foreclosures seemed to be due more to households' overreaching than to predatory lending. A disproportionate number of those being foreclosed on were well-educated, well-off and relatively young people.
Journal Article
Have the trends in housing bottomed out?
On a national level, the number of vacant homes is declining, as is the percentage of mortgages in serious delinquency. However, the demand for housing hasn't picked up, nor have prices.
Journal Article
Do Net Interest Margins for Small and Large Banks Vary Differently with Interest Rates?
Rajdeep Sengupta and Fei Xue examine the relative contributions of activities that compose bank NIMs as well as their sensitivities to interest rates. They find that the recent decline in bank NIMs was largely driven by changes in interest rates rather than changes in the composition of NIM components in bank portfolios. After controlling for financial and economic conditions that also affect bank NIMs, they find that NIM contributions from loans and deposits are highly sensitive to interest rates. However, these sensitivities are not always symmetric between large and small banks and between ...
Journal Article
Flight to safety and U.S. Treasury securities
As in most crises, investors turned to Treasuries in droves over the past couple of years, even as yields declined.
Journal Article
Home equity and household income
During 1995-2007, home equity increased more than gross income for high-, low- and middle-income groups.
Journal Article
A look at credit default swaps and their impact on the European debt crisis
Did you know that buying a credit default swap can be like buying insurance on your neighbor?s car?and then getting paid when that neighbor has an accident? Learn the ABCs of CDS, and find out why they are so important to any discussion of the European debt crisis.