Found 7 article(s) for author 'Financial Markets'

Brexit’s Blow To Globalization

Brexit’s Blow To Globalization. Carmen Reinhart, June 29. 2016, Opinion. “The United Kingdom’s Brexit referendum has shaken equity and financial markets around the world. As in prior episodes of contagious financial turmoil, the victory of the “Leave” vote sent skittish global investors toward the usual safe havens. US Treasury bonds rose, and the dollar, Swiss franc, and yen appreciated, most markedly against sterling.Link

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Heed the Fears of the Financial Markets

Heed the Fears of the Financial Markets. Lawrence Summers, January 10, 2016, Opinion, “Often markets are volatile at the end of a year and then settle down as a new year begins. Not this year. US and European markets closed lower on Friday after a very rough week despite a strong US jobs report. The week saw dramatic declines in China’s stock market and currency. Oil prices fell even in the face of major tension between Iran and Saudi Arabia. A week when bad market news makes the front page raises two questions. How much should forecasters and policymakers look to speculative markets as indicators of future prospects? And how alarmed should they be about the prospect of a global slowdown? Markets are more volatile than the fundamentals they seek to assess. Economist Paul Samuelson quipped 50 years ago, “the stock market has predicted nine of the last five recessions.” Former Treasury secretary Robert Rubin was right when he would regularly reassure anxious politicos in the Clinton White House that “markets go up, markets go down” on days when a market move created either joy or anxiety …” Link

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Asset Price Dynamics in Partially Segmented Markets

Asset Price Dynamics in Partially Segmented Markets. Robin Greenwood, Samuel Hanson, December 2015, Paper. “How do supply shocks in one financial market affect prices in other markets? We develop a model in which capital moves quickly within each asset class, but slowly between asset classes. While most investors specialize in a single market, a handful of generalists can gradually reallocate capital across markets. When a supply shock arrives, prices of risk in the impacted market become disconnected from those in others. Over the long-run, capital flows between markets and prices of risk become more closely aligned. While prices in the impacted market initially overreact to shocks, under plausible conditions, prices in related markets underreact …Link

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The Disintermediation of Financial Markets: Direct Investing in Private Equity

The Disintermediation of Financial Markets: Direct Investing in Private Equity. Victoria Ivashina, Josh Lerner, January 13, 2014, Paper. “This is the first large-sample study of direct private equity investments by institutional investors. The analysis uses a proprietary dataset of all such investments by seven large institutional investors over twenty years. Despite the substantial fee discounts, we find little evidence of attractive relative performance by direct investments. In particular, co-investments underperform traditional fund investments…” May require purchase or user account. Link Verified October 11, 2014

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The Rise and Fall of Securitization

The Rise and Fall of Securitization. Samuel G. Hanson, Adi Sunderam, December 2013, Paper. “The rise and fall of nontraditional securitizations—collateralized debt obligations and mortgage-backed securities backed by nonprime loans—played a central role in the financial crisis. Little is known, however, about the factors that drove the pre-crisis surge in investor demand for these products. Examining insurance companies’ and mutual funds’ holdings of fixed income securities, we find evidence suggesting that both agency problems and neglected risks played an important role…” Link Verified October 11, 2014

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Liability Structure in Small-Scale Finance: Evidence from a Natural Experiment

Liability Structure in Small-Scale Finance: Evidence from a Natural Experiment. Shawn Cole, September 2013, Paper. “Microfinance, the provision of small individual and business loans, has experienced dramatic growth, reaching over 150 million borrowers worldwide. Much of the success of microfinance has been attributed to attempts to overcome the challenges of information asymmetries in uncollateralized lending. However, very little is known about the optimal contract structure of these loans, and there is substantial variation across lenders, even within a particular setting. This paper exploits…” May require purchase or user account. Link verified August 21, 2014

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The Private Company Council

The Private Company Council. Karthik Ramanna, Luis M. Viceira, January 2013, Case. “Financial Accounting Foundation chairman Jack Brennan is under pressure from private-company interests to set up a new body—the Private Company Council—to determine separate GAAP for private companies. PCC advocates—including the US Chamber of Commerce—argue that traditional US GAAP has too many disclosure and fair-value requirements that impose very high compliance costs on private companies. But there are influential players—including the Big Four auditors—who oppose creating the PCC. They argue that the compliance costs of traditional…”  May require purchase or user account. Link verified March 28, 2014

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