Pros and Cons of Structural Models - Berkeley-Haas
... ii) Structural models of credit risk are often contrasted with statistical or “Reduced form” (RF) models of estimating credit spreads and default probabilities. • RF models assume default is not directly based on firms’ cash flows or values, but estimate a jump rate (intensity) to default empiricall ...
... ii) Structural models of credit risk are often contrasted with statistical or “Reduced form” (RF) models of estimating credit spreads and default probabilities. • RF models assume default is not directly based on firms’ cash flows or values, but estimate a jump rate (intensity) to default empiricall ...
Residential Lending
... 1 A $180,000 15-year fixed rate mortgage with a rate of 3.500% and an annual percentage rate of 3.680% would have 180 estimated monthly principal and interest payments of $1,286.79. If an escrow account is required or requested, the actual monthly payments will also include amounts for taxes and h ...
... 1 A $180,000 15-year fixed rate mortgage with a rate of 3.500% and an annual percentage rate of 3.680% would have 180 estimated monthly principal and interest payments of $1,286.79. If an escrow account is required or requested, the actual monthly payments will also include amounts for taxes and h ...
Household Credit Growth in Emerging Market Countries
... lower for some of the rapidly growing markets (Figure 2.7). This low share in total household credit reflects several factors such as a still-high and volatile interest rate environment, in addition to hindrances such as an inadequate legal framework for enforcing mortgages. Consumer loans in EM cou ...
... lower for some of the rapidly growing markets (Figure 2.7). This low share in total household credit reflects several factors such as a still-high and volatile interest rate environment, in addition to hindrances such as an inadequate legal framework for enforcing mortgages. Consumer loans in EM cou ...
Document
... • Non-systemic events—such as for example, people being persuaded by the failure of the system that the system must be changed – There is a limit to modelling—institutions and evolution and human agency must also be understood… – But we do at least get a better handle on the system by knowing its ch ...
... • Non-systemic events—such as for example, people being persuaded by the failure of the system that the system must be changed – There is a limit to modelling—institutions and evolution and human agency must also be understood… – But we do at least get a better handle on the system by knowing its ch ...
A Primer on Floating-Rate Notes
... well as Fed Funds Effective rate because these indices reset daily. The coupon payment that investors receive will be an average of these daily reset rates times the notional principal. Interestingly, the spread between the Prime Rate and the Fed Funds Effective rate has been virtually stable since ...
... well as Fed Funds Effective rate because these indices reset daily. The coupon payment that investors receive will be an average of these daily reset rates times the notional principal. Interestingly, the spread between the Prime Rate and the Fed Funds Effective rate has been virtually stable since ...
report of the annual national debt sustainability analysis
... contingent liabilities of the Federal, State and Local Governments amounting to N1.87 trillion. This figure is based partly on CBN study of State Governments obligations which had not been recognized in the book and figures from Federal Government agencies. This has serious implications for debt sus ...
... contingent liabilities of the Federal, State and Local Governments amounting to N1.87 trillion. This figure is based partly on CBN study of State Governments obligations which had not been recognized in the book and figures from Federal Government agencies. This has serious implications for debt sus ...
A Structured Approach to Stress Testing Residential Mortgage Portfolios
... behave differently, the core model is designed to deal with the conventional owner-occupier loan portfolios where the above factors will be at their strongest. The possibility that investors could behave differently can be addressed in a purpose built module for investment loans. Third, while there ...
... behave differently, the core model is designed to deal with the conventional owner-occupier loan portfolios where the above factors will be at their strongest. The possibility that investors could behave differently can be addressed in a purpose built module for investment loans. Third, while there ...
Fiscal Vulnerabilities and Risks from Local Government
... Box 1. China: Explaining “Augmented” Government Debt and Deficit1 Rationale. Infrastructure investment has become local governments' main strategy to foster growth and a preferred countercyclical tool, especially during the global crisis. However, local infrastructure spending has mainly been financ ...
... Box 1. China: Explaining “Augmented” Government Debt and Deficit1 Rationale. Infrastructure investment has become local governments' main strategy to foster growth and a preferred countercyclical tool, especially during the global crisis. However, local infrastructure spending has mainly been financ ...
CEPR POLICY INSIGHT No . 51 - Centre for Economic Policy
... control are shared by most countries and can be traced to pro-cyclical fiscal policy during the boom period preceding the financial crisis that started in August 2007, the fiscal cost of the financial rescue operations, the revenue losses caused by the recession and the discretionary fiscal measures ...
... control are shared by most countries and can be traced to pro-cyclical fiscal policy during the boom period preceding the financial crisis that started in August 2007, the fiscal cost of the financial rescue operations, the revenue losses caused by the recession and the discretionary fiscal measures ...
Documentos de Trabajo - Facultad de Ciencias Sociales
... during normal economic conditions. However, when leverage is sufficiently high and an adverse financial shock hits the economy, firms are forced to cut down on investment, leading to a protracted recession. Anticipating that such episodes are costly, firms behave in a precautionary manner during nor ...
... during normal economic conditions. However, when leverage is sufficiently high and an adverse financial shock hits the economy, firms are forced to cut down on investment, leading to a protracted recession. Anticipating that such episodes are costly, firms behave in a precautionary manner during nor ...
OPIC Presentation
... markets – markets where private sector finance or insurance is not available to American investors • Over the agency’s 37-year history, OPIC has supported $180 billion worth of investments, including more than $800 million to U.S. investors in Nigeria in 37 ...
... markets – markets where private sector finance or insurance is not available to American investors • Over the agency’s 37-year history, OPIC has supported $180 billion worth of investments, including more than $800 million to U.S. investors in Nigeria in 37 ...
Adequate explanations
... • How are lenders addressing these changes? • What does this mean for intermediaries? ...
... • How are lenders addressing these changes? • What does this mean for intermediaries? ...
NBER WORKING PAPER SERIES EFFICIENT BAILOUTS? Javier Bianchi Working Paper 18587
... during normal economic conditions. However, when leverage is sufficiently high and an adverse financial shock hits the economy, firms are forced to cut down on investment, leading to a protracted recession. Anticipating that such episodes are costly, firms behave in a precautionary manner during nor ...
... during normal economic conditions. However, when leverage is sufficiently high and an adverse financial shock hits the economy, firms are forced to cut down on investment, leading to a protracted recession. Anticipating that such episodes are costly, firms behave in a precautionary manner during nor ...
Firm Value
... Proposition II continues to predict that the expected return on the package of debt and equity does not change. This is demonstrated in Figure 15.4: The rassets line is still constant. However, the rdebt line now increases. Notice, though, that the requity line tapers off as the D/E increa ...
... Proposition II continues to predict that the expected return on the package of debt and equity does not change. This is demonstrated in Figure 15.4: The rassets line is still constant. However, the rdebt line now increases. Notice, though, that the requity line tapers off as the D/E increa ...
Financial planning
... Change in Working Capital • Duration of inventories • Duration of collection ...
... Change in Working Capital • Duration of inventories • Duration of collection ...
Week 11 Slides
... leverage enables a company to grow faster and also can raise its ROE (see sustainable growth formula) Negative side to additional debt comes in the form of expected costs of financial distress and loss of flexibility Even if default possibility is remote, lack of flexibility can impose severe co ...
... leverage enables a company to grow faster and also can raise its ROE (see sustainable growth formula) Negative side to additional debt comes in the form of expected costs of financial distress and loss of flexibility Even if default possibility is remote, lack of flexibility can impose severe co ...
Information Asymmetry within Financial Markets and Corporate
... Note: The bracketed coefficients indicate t-statistics. Based on the achieved results, we reckon to chose the "Within" estimator. This estimate indicates that the guaranteed variable "TANG" is no significant in the static regression case, with its effect on the financial leverage remaining ambiguous ...
... Note: The bracketed coefficients indicate t-statistics. Based on the achieved results, we reckon to chose the "Within" estimator. This estimate indicates that the guaranteed variable "TANG" is no significant in the static regression case, with its effect on the financial leverage remaining ambiguous ...
Aging and Deflation from a Fiscal Perspective
... First, a current larger fiscal deficit produces a temporary price rise that only affects the wellbeing of the existing generations, but does not impact that of the future generations. In contrast to the previous literature such as Bowen et al. (1960) and Barro (1974), we present a novel argument that ...
... First, a current larger fiscal deficit produces a temporary price rise that only affects the wellbeing of the existing generations, but does not impact that of the future generations. In contrast to the previous literature such as Bowen et al. (1960) and Barro (1974), we present a novel argument that ...
The European Monetary Fund
... – until 2007 - rising deficit of the rest of the world (vis-à-vis Germany) facilitated fiscal consolidation in Germany (figure 2). The opposite was the case in most other euro countries due to their current account deficit rising significantly between 2003 and 2008.Figure 2 also shows that the non-f ...
... – until 2007 - rising deficit of the rest of the world (vis-à-vis Germany) facilitated fiscal consolidation in Germany (figure 2). The opposite was the case in most other euro countries due to their current account deficit rising significantly between 2003 and 2008.Figure 2 also shows that the non-f ...
Chapter 6
... money over time based on goals and expected income. • cash flow statement. A summary of the amount of money received as well as the amount paid out for goods and services during a specific period. ...
... money over time based on goals and expected income. • cash flow statement. A summary of the amount of money received as well as the amount paid out for goods and services during a specific period. ...
Lost and Found: Market Access and Public Debt Dynamics
... access, the fiscal stance would have to have been corrected with respect to the time of market loss. Indeed, Kaminsky and Vega-Garcia (2016) show that countries able to significantly reduce the debt-to-export ratio over a five-year horizon experience shorter default spells. And yet interesting quest ...
... access, the fiscal stance would have to have been corrected with respect to the time of market loss. Indeed, Kaminsky and Vega-Garcia (2016) show that countries able to significantly reduce the debt-to-export ratio over a five-year horizon experience shorter default spells. And yet interesting quest ...
NBER WORKING PAPER SERIES FINANCIAL DISTRESS IN THE GREAT DEPRESSION Sonali Hazarika
... about 9.5% of asset value in their sample. Note that these are all ex post estimates (i.e., after distress has occurred) of the cost of debt. To the extent that they can be generalized, these papers indicate that the direct costs of debt are modest. By examining a much broader sample of firms, we ga ...
... about 9.5% of asset value in their sample. Note that these are all ex post estimates (i.e., after distress has occurred) of the cost of debt. To the extent that they can be generalized, these papers indicate that the direct costs of debt are modest. By examining a much broader sample of firms, we ga ...
Household debt
Household debt is defined as the amount of money that all adults in the household owe financial institutions. It includes consumer debt and mortgage loans. A significant rise in the level of this debt coincides historically with many severe economic crises and was a cause of the U.S. and subsequent European economic crises of 2007–2012. Several economists have argued that lowering this debt is essential to economic recovery in the U.S. and selected Eurozone countries.