Common (stock) sense about risk-shifting and bank bailouts

被引：26
|
作者：
Wilson L. [1 ]
Wu Y.W. [2 ]
机构：
[1] B.I. Moody III College of Business, Department of Economics and Finance, University of Louisiana at Lafayette, Lafayette, LA 70504-4570, 214 Hebrard Boulevard, Moody Hall 253
[2] Department of Economics, School of Business and Economics, Wilfrid Laurier University, Waterloo, ON N2L 3C5
来源：
Financial Markets and Portfolio Management | 2010年 / 24卷 / 1期
关键词：
Asset substitution; Bailout; Banks; Capital Assistance Program (CAP); Capital Purchase Program (CPP); Capital structure; Emergency Economic Stabilization Act (EESA); Lehman Brothers; Lending; Public-Private Investment Program (P-PIP); Risk-shifting; Too big to fail; Troubled Asset Relief Program (TARP);
D O I：
10.1007/s11408-009-0125-y
中图分类号：
学科分类号：
摘要：
If a bank is facing insolvency, it will be tempted to reject good loans and accept bad loans so as to shift risk onto its creditors. We analyze the effectiveness of buying up toxic mortgages in troubled banks, buying preferred stock, and buying common stock. If bailing out banks deemed "too big to fail" involves buying assets at above fair market values, then these banks are encouraged ex ante to gamble on bad assets. Buying up common (preferred) stock is always the most (least) ex ante- and ex post-efficient type of capital infusion, regardless of whether the bank volunteers for the recapitalization. © Swiss Society for Financial Market Research 2010.
引用
收藏
页码：3 / 29
页数：26
相关论文
共 50 条
12345