Found 490 article(s) in category 'Financial Services'

On the Direct and Indirect Real Effects of Credit Supply Shocks

On the Direct and Indirect Real Effects of Credit Supply Shocks. Laura Alfaro, March 5, 2018, Paper, “We consider the real effects of bank lending shocks and how they permeate the economy through buyer-supplier linkages. We combine administrative data on all firms in Spain with a matched bank-firm-loan dataset incorporating information on the universe of corporate loans for 2003-2013. Using methods from the matched employer-employee literature for handling large data sets, we identify bank-specific shocks for each year in our sample. Combining the Spanish Input-Output structure and firm-specific measures of upstream and downstream exposure, we construct firm-specific exogenous credit supply shocks and estimate their direct and indirect effects on real activity.Link

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Sources of Inaction in Household Finance: Evidence from the Danish Mortgage Market

Sources of Inaction in Household Finance: Evidence from the Danish Mortgage Market. John Y. Campbell, March 2018, Paper, “A common problem in household finance is that households are often inactive in response to incentives. Mortgages are generally the largest household liability, and mortgage refinancing is an important channel for monetary policy transmission, so inactivity in this setting can be socially costly. We study how the Danish population responds to mortgage refinancing incentives between 2010 and 2014, building an empirical model that separately estimates time-dependent inaction (a low probability of responding to a refinancing incentive in a given quarter), and state-dependent inaction (a psychological addition to the financial cost of refinancing)Link

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The Changing Landscape of Auditor Liability

The Changing Landscape of Auditor Liability. Suraj Srinivasan, March 1, 2018, Paper, “We document the declining role of Rule 10b-5 (a general catch-all antifraud provision) in securities class-action lawsuits against auditors since the passage of the PSLRA. The decline is perhaps most noticeable in dismissal rates, which increased monotonically over each three-year period from 1996 to 2013. Further, the likelihood that an auditor will be sued following a severe restatement has significantly declined, and settlements have decreased. One explanation for this trend is the recent wave of Supreme Court cases limiting the scope of Rule 10b-5 against private actors.Link

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Do the Rich Get Richer in the Stock Market? Evidence from India

Do the Rich Get Richer in the Stock Market? Evidence from India. John Y. Campbell, March 2018, Paper, “We use data on Indian stock portfolios to show that return heterogeneity is the primary contributor to increasing inequality of wealth held in risky assets by Indian individual investors. Return heterogeneity increases equity wealth inequality through two main channels, both of which are related to the prevalence of undiversified accounts that own relatively few stocks. First, some undiversified portfolios randomly do well, while others randomly do poorly. Second, larger accounts diversify more effectively and thereby earn higher average log returns even though their average simple returns are no higher than those of smaller accounts.Link

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Max Bazerman on preventing the next financial crisis, behavioral ethics, and becoming good decision makers

Max Bazerman on preventing the next financial crisis, behavioral ethics, and becoming good decision makers February 2018. GrowthPolicy’s Devjani Roy interviewed Max Bazerman, Jesse Isidor Straus Professor of Business Administration at Harvard Business School, Co-Director of the Center for Public Leadership at Harvard Kennedy School, and Faculty Co-Chair of the Behavioral Insights Group at the […]

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Stock market could drop by a third

Stock market could drop by a third. Martin Feldstein, February 5, 2018, Video, “A prominent Harvard economist is warning that the U.S. stock market, which on Monday extended Friday’s big drop — is set for a drop of as much as a third of its current value, an outlook that would entail the Dow Jones Industrial Average tumbling to approximately 16,000 from its current lofty level.Link

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Allen Ferrell on income inequality, financial crises, Corporate Social Responsibility, and securities legislation

Allen Ferrell on income inequality, financial crises, Corporate Social Responsibility, and securities legislation January 2018. GrowthPolicy’s Devjani Roy interviewed Professor Allen Ferrell, Greenfield Professor of Securities Law at Harvard Law School, on income inequality, financial crises, Corporate Social Responsibility, and securities legislation. | Click here for more interviews like this one. Links: Allen Ferrell’s Harvard […]

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Does Sustainable Investing Lead to Lower Returns?

Does Sustainable Investing Lead to Lower Returns? George Serafeim, January 25, 2018, Paper, “Taking into account the work that the Sustainability Accounting Standards Board has done in identifying material ESG issues, industry by industry, in another study we analyzed more than 2,000 stocks over 22 years and showed that firms improving their performance on material ESG issues, such as on environmental impact in the power sector, workplace safety in the mining sector, and employee inclusiveness in the information-technology sector, have significantly higher future risk-adjusted returns. A negative screening in the oil-and-gas sector would exclude all companies, while an ESG integration approach would take into account how different firms are investing in renewable-energy generation and electric charging stations, dimensions on which Shell and Exxon Mobil, for instance, look very different. […]we documented that development of ESG funds is driven by marketing goals as opposed to investment logic.Link

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Trade Invoicing, Bank Funding, and Central Bank Reserve Holdings

Trade Invoicing, Bank Funding, and Central Bank Reserve Holdings. Gita Gopinath, Jeremy Stein, 2018, Paper, “In recent work (Gopinath and Stein (2017)) we explore how a currency like the dollar can become entrenched as a dominant global currency, focusing on the two-way feedback between trade invoicing and banking structure. The basic idea is that when a larger share of a country’s imports are invoiced in dollars, its citizens have a greater demand for dollar-denominated safe claims.Link

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