The bankers' new clothes Admati, Anat; Admati, Anat; Hellwig, Martin
2014., 20130215, 2013-02-15, 2014-03-23, 20130101, ♭2013, 2013
eBook
What is wrong with today's banking system? The past few years have shown that risks in banking can impose significant costs on the economy. Many claim, however, that a safer banking system would ...require sacrificing lending and economic growth.The Bankers' New Clothesexamines this claim and the narratives used by bankers, politicians, and regulators to rationalize the lack of reform, exposing them as invalid.
Admati and Hellwig argue we can have a safer and healthier banking system without sacrificing any of the benefits of the system, and at essentially no cost to society. They show that banks are as fragile as they are not because they must be, but because they want to be--and they get away with it. Whereas this situation benefits bankers, it distorts the economy and exposes the public to unnecessary risks. Weak regulation and ineffective enforcement allowed the buildup of risks that ushered in the financial crisis of 2007-2009. Much can be done to create a better system and prevent crises. Yet the lessons from the crisis have not been learned.
Admati and Hellwig seek to engage the broader public in the debate by cutting through the jargon of banking, clearing the fog of confusion, and presenting the issues in simple and accessible terms.The Bankers' New Clothescalls for ambitious reform and outlines specific and highly beneficial steps that can be taken immediately.
We use loan-level data to examine how large international banks reduced their cross-border lending after the collapse of Lehman Brothers. Country, firm, and bank fixed effects allow us to disentangle ...credit supply and demand and to simultaneously control for the unobserved traits of banks and the countries and firms they lend to. We document substantial heterogeneity in the extent to which different banks retrenched from the same country. Banks reduced credit less to markets that were geographically close; where they were more experienced; where they operated a subsidiary; and where they were integrated into a network of domestic co-lenders.
This article empirically investigates the competitive effects of government bail-out policies. We construct a measure of bail-out perceptions by using rating information. From there, we construct the ...market shares of insured competitor banks for any given bank, and analyze the impact of this variable on banks' risk-taking behavior, using a large sample of banks from OECD countries. Our results suggest that government guarantees strongly increase the risk-taking of competitor banks. In contrast, there is no evidence that public guarantees increase the protected banks' risk-taking, except for banks that have outright public ownership. These results have important implications for the effects of the recent wave of bank bail-outs on banks' risk-taking behavior.
From the Editor's Desk Manickaraj, M
Vinimaya (Pune),
01/2023, Volume:
44, Issue:
1
Journal Article
In their article, 'Restructuring: A Real Lifeline or a Hobson's Choice?-A Case from the Textile Sector', the authors, Mr. Puneet Bansal and Mr. Sagar Bhadra have demonstrated how a sensible and ...timely restructuring cf loans can help all the stakeholders in a company, with the help cfa case study cf Shubhalakshrni Polyesters Limited. Banking is a human resource intensive industry and hence, AI would make a tremendous impact in banking operations. 'Unlocking Potential: Reinforcing the SHG-BLP through Collaborative Efforts and Innovative Lending Mechanisms', is an article by Dr. Naveen Kumar K. wherein he has discussed the RBI's latest Master Circular on SHG-BLP which provides guidelines for streamlining the scheme for enhancing access to banking services for the poor as part of the government's ongoing ejforts to increase financial inclusion.
An exogenous expansion in mortgage credit has significant effects on house prices. This finding is established using US branching deregulations between 1994 and 2005 as instruments for credit. Credit ...increases for deregulated banks, but not in placebo samples. Such differential responses rule out demand-based explanations, and identify an exogenous credit supply shock. Because of geographic diversification, treated banks expand credit: housing demand increases, house prices rise, but to a lesser extent in areas with elastic housing supply, where the housing stock increases instead. In an instrumental variable sense, house prices are well explained by the credit expansion induced by deregulation.
In this ground-breaking analysis of the world's first private banks, Edward Cohen convincingly demonstrates the existence and functioning of a market economy in ancient Athens while revising our ...understanding of the society itself. Challenging the "primitivistic" view, in which bankers are merely pawnbrokers and money-changers, Cohen reveals that fourth-century Athenian bankers pursued sophisticated transactions. These dealings--although technologically far removed from modern procedures--were in financial essence identical with the lending and deposit-taking that separate true "banks" from other businesses. He further explores how the Athenian banks facilitated tax and creditor avoidance among the wealthy, and how women and slaves played important roles in these family businesses--thereby gaining legal rights entirely unexpected in a society supposedly dominated by an elite of male citizens.
Why are people continually surprised to discover that money is "just" meaning? Mutual Life, Limited spends time among those who, in acknowledging the fictions of finance, are making money anew. It ...documents ongoing efforts to remake money and finance by Islamic bankers who seek to avoid interest and local currency proponents who would stand outside of national economies. It asks how alternative moneys both escape and reenact dominant forms of money and finance, and reflects critically on their broader implications for scholarship.
Social Banking describes a way of value-driven banking that has a positive social and ecological impact at its heart, as well as its own economic sustainability. Although it has a long and successful ...history, it has arguably never been more topical than it is now in the aftermath of the latest financial crisis. Most Social Banks came out of this crisis not only unscathed but much stronger and bigger than they were before. And contrary to their conventional peers, none of the Social Banks had to be bailed out with public funds. This increasingly attracts the interest not only of clients searching for safe and sensible ways to deposit their funds but also of conventional banks that begin to understand the potential of a more socially oriented approach towards banking.
Social Banks and the Future of Sustainable Finance is the first book to deliver a comprehensive and detailed overview about the past, present and possible future of Social and Sustainable Banking for researchers, students and a professional audience. The authors are experts from research and practice and have bee involved in Social Banking for many years. Thus they combine state-of-the-art expertise with valuable insider knowledge.
The book covers the following topics: the history of Social Banking, the need for Social Banking in the current economy, the particular issues of managing a Social Bank as business enterprise, Social Banking products and services, the special role of donations and foundations for financing change, the opportunities and challenges for Social Banks lying ahead, and concrete directions for the future of Social Banking. In addition to these respective analyses are many real-world examples and interviews with representatives of Social Banks. As such, this comprehensive collection delivers valuable insights for academics, students and professionals who are interested in the growing field of Social Banking.
Learning by example Strang, David
2010., 20100701, 2010, 2010-07-01, 20100101
eBook
In business, as in other aspects of life, we learn and grow from the examples set by others. Imitation can lead to innovation. But in order to grow innovatively, how do businesses decide what firms ...to imitate? And how do they choose what practices to follow? Learning by Example takes an unprecedented look at the benchmarking initiative of a major financial institution. David Strang closely follows twenty-one teams of managers sent out to observe the practices of other companies in order to develop recommendations for change in their own organization.
This guide provides an integrated, structured process for managing risks in Islamic banks. It includes risk identification, measurement and mitigation, and compares risk management in conventional ...and Islamic banks.
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