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2022

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Articles 31 - 60 of 277

Full-Text Articles in Finance and Financial Management

Korea: Blanket Guarantee, 1997, Bailey Decker Dec 2022

Korea: Blanket Guarantee, 1997, Bailey Decker

Journal of Financial Crises

Korea entered the Asian Financial Crisis in August 1997 with highly leveraged firms and a banking system inexperienced in managing systemic risk. Korea faced a currency crisis and a banking crisis, as foreign banks froze credit to Korean commercial banks and merchant banks. On August 25, 1997, the Ministry of Economy and Finance (MOEF) announced that it would guarantee all Korean financial institutions’ foreign debt—both existing debt and new borrowings. Nonetheless, foreign lenders continued to withdraw credit from Korean financial institutions. On November 19, 1997, a newly appointed MOEF minister announced a suite of measures to promote foreign creditors’ confidence …

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Jamaica: Finsac Blanket Guarantee, 1997, Ayodeji George Dec 2022

Jamaica: Finsac Blanket Guarantee, 1997, Ayodeji George

Journal of Financial Crises

After a period of sustained distress in the early 1990s, Jamaican financial institutions faced significant liquidity issues by 1996, evidenced by runs on banks by depositors. The government responded by creating the Financial Sector Adjustment Company (FINSAC) on January 29, 1997, to rehabilitate weak financial institutions and administer a blanket guarantee on financial sector liabilities. The blanket guarantee covered all deposit-taking financial institutions, life insurance policy providers, and pension funds registered under the Banking Act, Financial Institutions Act, and Insurance Act. Within eligible institutions, the blanket guarantee covered depositors’ funds in licensed deposit-taking institutions, pension funds managed by authorized institutions, …

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Ireland: Credit Institution (Financial Support) Scheme, 2008, Stella Schaefer-Brown Dec 2022

Ireland: Credit Institution (Financial Support) Scheme, 2008, Stella Schaefer-Brown

Journal of Financial Crises

The Global Financial Crisis exposed fragilities in the Irish banking system and led to widespread runs on Irish banks. Irish authorities attempted to address the runs on September 22, 2008, by increasing the country’s deposit guarantee limit from EUR 20,000 to EUR 100,000 (USD 28,800 to USD 140,000) and raising the coverage of deposits from 90% to 100%. When the runs continued, the Irish minister for finance announced a blanket guarantee of bank liabilities on September 30 without consulting European Union authorities. The announcement specified the blanket guarantee would be effective immediately and remain in effect for two years. The …

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Indonesia: Blanket Guarantee, 1998, Ayodeji George Dec 2022

Indonesia: Blanket Guarantee, 1998, Ayodeji George

Journal of Financial Crises

The Indonesian government closed 16 banks on November 1, 1997. At the time, the government said it would guarantee depositors up to 20 million Indonesian rupiah (IDR; USD 6,000) per account. The lack of immediate full protection for large depositors caused deposit runs throughout the banking sector and undermined foreign confidence in the Indonesian financial system. In response, the Indonesian president on January 26, 1998, announced a blanket guarantee and created the Indonesian Bank Restructuring Agency (IBRA) to administer the guarantee and other bank rehabilitation efforts. The blanket guarantee covered all depositors and nonsubordinated creditors in locally incorporated commercial banks. …

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Ecuador: Blanket Guarantee, 1998, Bailey Decker Dec 2022

Ecuador: Blanket Guarantee, 1998, Bailey Decker

Journal of Financial Crises

After a series of exogenous shocks hit the Ecuadorian economy in 1997–1998, foreign creditors reassessed their emerging-market risk and reduced external credit lines to Ecuador, thus draining liquidity. The closure of a small bank called Solbanco in April 1998 triggered deposit runs at other banks. Banks sought assistance from the Central Bank of Ecuador (Banco Central del Ecuador, or BCE). By the end of September 1998, the BCE had issued emergency loans to 11 financial institutions, totaling nearly 30% of the money base. The crisis accelerated in August 1998 when Banco de Prestamos, the sixth-largest bank, was closed; the existing …

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Finland: Government Guarantee Fund, Blanket Guarantee, 1992, Anmol Makhija Dec 2022

Finland: Government Guarantee Fund, Blanket Guarantee, 1992, Anmol Makhija

Journal of Financial Crises

Following a period of rapid financial liberalization and a record credit boom in the 1980s, Finland’s financial system suffered steadily increasing loan losses and falling earnings beginning in 1990. The Finnish Parliament created the Government Guarantee Fund (GGF) in April 1992 to support banks with loans, capital, and guarantees. In a press release issued on August 6, 1992, the government said the GGF would “secure the stable functioning of the banking system under any circumstances [emphasis added]”. Six months later, the Parliament of Finland specifically required the GGF to guarantee that all Finnish banks could meet their commitments. The government …

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Denmark: General Guarantee Scheme, 2008, Benjamin Hoffner Dec 2022

Denmark: General Guarantee Scheme, 2008, Benjamin Hoffner

Journal of Financial Crises

As foreign credit in Denmark dried up during the summer of 2008, Danish banks became increasingly reliant on short-term borrowing. The government took over the failing Roskilde Bank, the country’s eighth-largest bank, in late August. On October 5, 2008, the government announced a voluntary General Guarantee Scheme to fully insure deposits and other senior liabilities of participating banks. Banks could participate in the scheme by becoming members of the financial sector’s banking consortium, Det Private Beredskab, or in English, the Private Contingency Association (PCA), before October 13, 2008. The General Guarantee Scheme fully insured all depositors and senior unsecured creditors …

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Blanket Guarantees Survey, Christian M. Mcnamara, Carey K. Mott, Greg Feldberg, Andrew Metrick Dec 2022

Blanket Guarantees Survey, Christian M. Mcnamara, Carey K. Mott, Greg Feldberg, Andrew Metrick

Journal of Financial Crises

This paper surveys 10 blanket guarantee (BG) programs across 13 Key Design Decisions. The defining characteristics of these programs in terms of their inclusion in our BG series are (a) that they guaranteed a broader range of liabilities beyond deposit accounts and (b) that the guarantees covered existing liabilities in addition to newly issued ones. Each case represents an effort to eliminate creditors’ incentive to withdraw funding from institutions by guaranteeing that the funding will be paid back even if the institutions are unable to do so themselves. The main themes that emerge are: (a) the inability of blanket guarantees …

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Reserve Requirements Survey, June Rhee, Carey K. Mott, Greg Feldberg, Andrew Metrick Dec 2022

Reserve Requirements Survey, June Rhee, Carey K. Mott, Greg Feldberg, Andrew Metrick

Journal of Financial Crises

Banks have a private motive to hold some level of cash and liquid reserves, but the negative externalities of bank runs create a public interest in setting a regulatory level higher than the privately optimal level. We can think of such reserve requirements (RRs) as the original form of liquidity regulation. In this paper, we focus on 14 cases in which central banks adjusted RRs after crises hit, typically to deal with liquidity shortages in the banking system. We observe that RR adjustments have several advantages in a crisis: (1) such changes require little process, and the change for banks …

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Fire Sales, The Lolr, And Bank Runs With Continuous Asset Liquidity, Ulrich Bindseil, Edoardo Lanari Dec 2022

Fire Sales, The Lolr, And Bank Runs With Continuous Asset Liquidity, Ulrich Bindseil, Edoardo Lanari

Journal of Financial Crises

Banks’ asset fire sales and recourse to central bank credit are modeled with continuous asset liquidity, allowing us to derive the liability structure of a bank. Both asset sales liquidity and the central bank collateral framework are modeled as power functions within the unit interval. Funding stability is captured as a strategic bank run game in pure strategies between depositors. Fire sale liquidity and the central bank collateral framework determine jointly the ability of the banking system to deliver maturity transformation without endangering financial stability. The model also explains why banks tend to use the least liquid eligible collateral with …

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Hotel Industry Performance In 2021-2022 And The Jhfm Index, Atul Sheel Nov 2022

Hotel Industry Performance In 2021-2022 And The Jhfm Index, Atul Sheel

Journal of Hospitality Financial Management

No abstract provided.

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Hospitality Sector Revenues And Employment In The Eagle Ford Shale, 2010-2019, Javier Oyakawa Nov 2022

Hospitality Sector Revenues And Employment In The Eagle Ford Shale, 2010-2019, Javier Oyakawa

Journal of Hospitality Financial Management

By taking advantage of proprietary data from input- output tables’ time series and by using econometric methods, this study estimated job and output multipliers affecting the hospitality sector in Eagle Ford Shale (EFS) between 2010 and 2019. In 2019, in the EFS area, the hospitality sector, including the hotel and food subsectors, received 32.5% of its increased revenues from oil and gas activities when comparing the years 2019 and 2010. For each new job in the energy industry, the hospitality sector received between $10,185 and $12,744. In the same year, hotel subsector revenues due to oil and gas activities explained …

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Financial Impact Of Nutrition Labeling For Restaurants, Mark S. Johnson Nov 2022

Financial Impact Of Nutrition Labeling For Restaurants, Mark S. Johnson

Journal of Hospitality Financial Management

Over the period 2006 to 2018 many attempts to institute food labeling in restaurants (FLR) have occurred. We examine the impact of federal FLR regulations on equity in the restaurant industry. We find no support for the idea that passage of federal FLR legislation directly altered firm value. However, Food and Drug Administration (FDA) rulemaking has had a positive effect on restaurants. The Federal rules are preemptory to state and local rules providing the industry with consistent, straightforward, rules across all jurisdictions. The preemptory aspect may reduce overall industry costs of regulation. We suggest that rule-making by the regulatory agency …

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The Impacts Of Covid-19 On Capital Structure Determinants Of Hotel Real Estate Investment Trusts, Marcos Medeiros, Nan Hua, Youcheng Wang Nov 2022

The Impacts Of Covid-19 On Capital Structure Determinants Of Hotel Real Estate Investment Trusts, Marcos Medeiros, Nan Hua, Youcheng Wang

Journal of Hospitality Financial Management

Real Estate Investment Trusts (REITs) are responsible for more than seventy-five percent of the hotel ownership structure in the USA. The effects of COVID-19 restrictions on hotel REITs were devastating due to the unpredictability of revenues and cash flows, directly impacting managerial decisions on how to adapt REITs' capital structure quickly. This paper used quarterly hotel REIT financial data of the 18 most representative U.S. H-REITs from January 2015 through December 2020 to understand the moderating effects of COVID-19 on hotel REITs' capital structure determinants. Analyzing a panel data of 472 observations, this study found robust empirical evidence that confirms …

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The Hidden Costs Of Financing A National Football League Stadium With Municipal Bonds: The Case Of Allegiant Stadium In Las Vegas, Leobardo Diosdado, Marco Lam, Charlie Parrish Nov 2022

The Hidden Costs Of Financing A National Football League Stadium With Municipal Bonds: The Case Of Allegiant Stadium In Las Vegas, Leobardo Diosdado, Marco Lam, Charlie Parrish

Journal of Applied Sport Management

The development of professional sports stadiums in the United States typically relies on public funding in the form of municipal bonds. Prior research has identified several economic and noneconomic reasons local governments choose to direct public funds towards the construction of stadiums. The overall conclusion of this research suggests sport stadiums do not result in significant increases in economic activity and therefore subsidized stadium development projects lack economic justification. In this study, the process of issuing bonds is examined. The authors describe the bond issuance process and utilize data associated with the bonds for the development of Allegiant Stadium in …

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Digitalization And Tax-Motivated Income Shifting, Devenni Putri Fau, Lestari Kurniawati Sep 2022

Digitalization And Tax-Motivated Income Shifting, Devenni Putri Fau, Lestari Kurniawati

BISNIS & BIROKRASI: Jurnal Ilmu Administrasi dan Organisasi

Numerous studies show that the tax rate difference between parent and subsidiaries as well as among subsidiaries acts as the incentive for income shifting between multinational corporations (MNCs). Digital business models that emerged as an impact of digital transformation may exacerbate income shifting by MNCs. However, empirical studies to support the relation between digital business models and income shifting is still scarce. Thus, this study examined whether Indonesia’s foreign-owned manufacturing companies shift income in respect to its foreign-parent tax rate and if the level of digitalization exacerbates the practice. This study used the income-shifting approach by Hines and Rice (1994) …

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Lessons Learned: Kevin Warsh, Matthew A. Lieber Sep 2022

Lessons Learned: Kevin Warsh, Matthew A. Lieber

Journal of Financial Crises

As senior deputy director of the Division of Supervision and Consumer Protection at the Federal Deposit Insurance Corporation (FDIC), Spoth led examinations, enforcement actions, problem bank remediations, and failure resolutions, among a range of responsibilities. During the Global Financial Crisis, he was on the front lines of fast-moving policy discussions and actions to help stabilize the financial system, and he oversaw the closure and restructuring of some of the nation’s largest banks. This abstract is based on an interview with Spoth on February 4, 2021.

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Lessons Learned: Christopher Spoth, Sandra Ward Sep 2022

Lessons Learned: Christopher Spoth, Sandra Ward

Journal of Financial Crises

As senior deputy director of the Division of Supervision and Consumer Protection at the Federal Deposit Insurance Corporation (FDIC), Spoth led examinations, enforcement actions, problem bank remediations, and failure resolutions, among a range of responsibilities. During the Global Financial Crisis, he was on the front lines of fast-moving policy discussions and actions to help stabilize the financial system, and he oversaw the closure and restructuring of some of the nation’s largest banks. This abstract is based on an interview with Spoth on February 4, 2021.

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Lessons Learned: Brian Sack, Sandra Ward Sep 2022

Lessons Learned: Brian Sack, Sandra Ward

Journal of Financial Crises

Charged with overseeing the implementation of the asset-purchase programs and liquidity facilities in his roles as executive vice president of the Markets Group and manager of the System Open Market Account at the Federal Reserve Bank of New York (FRBNY), Brian Sack played a critical role in keeping markets functioning during the years 2009–2012. He served as an adviser to top policymakers, and, in addition to implementing the various programs designed to stabilize financial conditions, he monitored their impact and measured their performance. This Lessons Learned summary is based on an interview with Sack on November 13, 2020.

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Lessons Learned: Nathan Sheets, Yasemin Sim Esmen, Rosalind Z. Wiggins Sep 2022

Lessons Learned: Nathan Sheets, Yasemin Sim Esmen, Rosalind Z. Wiggins

Journal of Financial Crises

Between 2007 and 2011, Nathan Sheets was director of the Division of International Finance at the Board of Governors of the Federal Reserve System. He oversaw the operations of the division and advised the Federal Open Market Committee (FOMC) on economic and financial developments in foreign countries. Sheets also regularly represented the Federal Reserve Board at international meetings and in its contacts with foreign central banks. Under his helm, the division was involved in helping establish and manage the US dollar liquidity swap lines with foreign central banks. This Lessons Learned abstract is based on an interview with Sheets on …

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Lessons Learned: Frederic Mishkin, Matthew A. Lieber Sep 2022

Lessons Learned: Frederic Mishkin, Matthew A. Lieber

Journal of Financial Crises

Rick Mishkin served as a member of the Board of Governors of the Federal Reserve System from 2006 to 2008 and as director of research at the Federal Reserve Bank of New York from 1994 to 1997. A leading expert on monetary economics and financial markets and a professor at Columbia University’s School of Business since 1983, Mishkin has written 20 books, including the textbook The Economics of Money, Banking, and Financial Markets. This Lessons Learned is based on an interview with Mishkin conducted on October 20, 2020.

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Lessons Learned: Susan Mclaughlin, Matthew A. Lieber Sep 2022

Lessons Learned: Susan Mclaughlin, Matthew A. Lieber

Journal of Financial Crises

A veteran staff member of the Federal Reserve Bank of New York (FRBNY), Susan McLaughlin served as head of the discount window and chief operating officer of the FRBNY’s Markets Trading Desk during the Global Financial Crisis. She was centrally involved in the Fed’s policy response to the disruptions to secured and unsecured funding markets during 2007–2008. Following the crisis, McLaughlin coordinated an effective Fed initiative to reform the triparty repurchase agreement (repo) market’s settlement infrastructure. The Fed’s reform efforts, engaging the financial industry under FRBNY president Bill Dudley, were instrumental in im-proving the stability of the funding market. This …

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Lessons Learned: Simon Potter, Maryann Haggerty Sep 2022

Lessons Learned: Simon Potter, Maryann Haggerty

Journal of Financial Crises

Simon Potter, an economist, worked at the Federal Reserve Bank of New York for more than two decades. Leading up to the Global Financial Crisis, he was the New York Fed’s associate director of economic research; in 2010, he became director. In 2012, he shifted to become the head of the markets group, putting him at the helm of the Fed’s open markets operations, the mechanism by which the central bank steers monetary policy and interest rates. He moved to the private sector in 2019. For this April 2021 Lessons Learned interview, he emphasized that these are his personal opinions, …

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Lessons Learned: Kieran J. Fallon, Matthew A. Lieber Sep 2022

Lessons Learned: Kieran J. Fallon, Matthew A. Lieber

Journal of Financial Crises

Presently the senior deputy general counsel for regulation and government affairs at PNC Fi-nancial Services Group, Kieran Fallon completed a 16-year tenure in the legal division of the Board of Governors of the Federal Reserve System in 2011. As associate general counsel dur-ing the Global Financial Crisis (GFC), he helped design the Federal Reserve’s Commercial Pa-per Funding Facility, restructure American International Group (AIG), and implement the Dodd-Frank Act. Relatedly, Fallon also served as general counsel for the Financial Stability Oversight Board from 2008 to 2011. This Lessons Learned is based on an interview conducted with Fallon on August 13, 2020.

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Lessons Learned: Steven B. Kamin, Yasemin Sim Esmen Sep 2022

Lessons Learned: Steven B. Kamin, Yasemin Sim Esmen

Journal of Financial Crises

Steven B. Kamin was the deputy director of the division of international finance at the Federal Reserve Board during the Global Financial Crisis (GFC) and was appointed director in 2011. He was responsible for research, policy analysis, and reporting in the areas of foreign economic activity, US external trade and capital flows, and developments in international financial markets and institutions. This Lessons Learned is based on an interview conducted with Kamin on August 16, 2019.

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Lessons Learned: Seth Carpenter, Maryann Haggerty Sep 2022

Lessons Learned: Seth Carpenter, Maryann Haggerty

Journal of Financial Crises

Seth Carpenter was a senior staff member of the Division of Monetary Affairs at the Federal Reserve Board during the 2007–09 Global Financial Crisis (GFC), meaning he was part of the team that advised the Board of Governors and members of the Federal Open Market Committee (FOMC) in setting monetary policy. He led the Board team that worked daily with the Open Market Trading Desk at the Federal Reserve Bank of New York to implement policy. He left the Federal Reserve System as deputy director of monetary affairs in 2014 to work at the US Department of the Treasury, where …

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Lessons Learned: Tim Clark, Lynnley Browning Sep 2022

Lessons Learned: Tim Clark, Lynnley Browning

Journal of Financial Crises

During the Global Financial Crisis of 2007–09, Tim Clark was senior adviser in the Division of Banking Supervision and Regulation at the Board of Governors of the Federal Reserve System. Clark was a chief architect of the Federal Reserve’s capital and liquidity stress tests that helped to stabilize the banks. He was also one of the leaders behind the implementation of the Dodd-Frank Act and other reforms at the Federal Reserve, and ultimately served as deputy director of the Division for Supervision and Regulation. This abstract is based on an interview with Clark that occurred on December 13, 2019.

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Lessons Learned: John Bovenzi, Sandra Ward Sep 2022

Lessons Learned: John Bovenzi, Sandra Ward

Journal of Financial Crises

As a deputy to the chairman of the Federal Deposit Insurance Corporation (FDIC) and in his role as chief operating officer of the agency, John Bovenzi provided policy advice and oversaw the agency’s operations, including business lines, bank supervision, bank closings, deposit insurance, and administrative affairs. Bovenzi’s most notable role during the Global Financial Crisis was manning the helm of mortgage lender IndyMac after the FDIC took it over in July 2008 to position it for a sale. This abstract is based on an interview with Bovenzi conducted on December 2, 2020

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The Internal Capital Markets Of Global Dealer Banks, Arun Gupta Sep 2022

The Internal Capital Markets Of Global Dealer Banks, Arun Gupta

Journal of Financial Crises

This study uncovers the existence of a trillion-dollar internal capital market that played a central role in the financing of dealer banks during the 2007–09 Global Financial Crisis. Hand-collecting a novel set of dealer microdata at the subsidiary level, I present a unique set of facts on the evolution of inter-affiliate loans between US primary dealers and their (primarily foreign) siblings. First, the aggregate size of these dealer internal capital markets quadrupled from $335 billion in 2001 to $1.2 trillion by 2007. Second, 25 percent of total repurchase agreements and 62 percent of total securities lending reported on US primary …

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From Lost Turnover To Nonperforming Loans: The Impact Of The Covid-19 Pandemic On The Economy And On The Financial System, Antonio Sánchez Serrano Sep 2022

From Lost Turnover To Nonperforming Loans: The Impact Of The Covid-19 Pandemic On The Economy And On The Financial System, Antonio Sánchez Serrano

Journal of Financial Crises

The COVID-19 pandemic created an unprecedented economic shock across the world. As a result of the coronavirus outbreak and the related health measures, nonfinancial corporations providing nonessential goods or services that cannot be consumed remotely have experienced a large decrease in their turnover. Using balance sheets and flows statements, we are able to quantify the impact of the pandemic on nonfinancial corporations and households, according to several scenarios for the pandemic over 2021. The impact is largely heterogeneous across sectors and amounts to up to 20% of the turnover for euro area nonfinancial corporations. Stress in these corporations and households …

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