Search Results
Working Paper
Does the Japanese stock market price bank risk? evidence from financial firm failures
The efficiency of Japanese stock market to appropriately price the riskiness of Japanese firms has been frequently questioned, particularly with respect to Japanese banks which have experienced severe financial distress in recent years. This paper examines the response in the stock market returns of Japanese commercial banks to the failure of four commercial banks and two securities firms between 1995 and 1998. The analysis finds that the stock market responded to new information of the failures and did so rationally. Financially weaker banks were affected more adversely by the failure of ...
Journal Article
A comparison of U.S. corporate and bank insolvency resolution
In the U.S., the insolvency resolution of most corporations is governed by the federal bankruptcy code and is administered by special bankruptcy courts. Most large corporate bankruptcies are resolved under Chapter 11 reorganization proceedings. However, commercial bank insolvencies are governed by the Federal Deposit Insurance Act and are administered by the FDIC. These two resolution processes?corporate bankruptcy and bank receiverships?differ in a number of significant ways, including the type of proceeding (judicial versus administrative); the rights of managers, stockholders, and ...
Journal Article
Deregulation of the financial sector
Journal Article
The federal safety net: not for banks only
Working Paper
Banking and currency crises and systemic risk: a taxonomy and review
Many countries have experienced banking and currency crises in recent years. Although these crises appear to share many common causes and consequences, they have generally been analysed by different sets of economists. This paper develops a common framework, applies this framework to analysing recent crises, evaluates the historical evidence, and suggests potential solutions. Governments are identified as one of the major causes of the crises through first providing poorly structured financial guarantees that both increase fragility and misallocate resources, then pursuing unstable ...