<p>I study local shocks to consumer credit supply arising from the opening</p><p>of bank-related retail stores. Bank-related store openings coincide with</p><p>sharp increases in credit card placements in the neighborhood of the</p><p>store, in the months surrounding the store opening, and with the bank</p><p>that owns the store. I exploit this relationship to instrument for new</p><p>credit cards at the individual level, and find that obtaining a new</p><p>credit card sharply increases total borrowing as well as default risk,</p><p>particularly for risky and opaque borrowers. In line with theories of</p><p>default externality, I observe that existing lenders react to the</p><p>increased consumer borrowing and associated riskiness by contracting</p><p>their own supply. In particular, in the year following the issuance of a</p><p>new credit card, banks without links to stores reduce credit card limits</p><p>by 24-51%, offsetting most of the initial increase in total credit</p><p>limits.</p> / Dissertation

The theme of the work is credit risk insurance. The main objective is to analyze this specific type of insurance, define its role in insurance system and for covering credit risk. Analyzed are both commercial insurance and insurance with state support. The important part of this work is also analysis of czech and world insurance markets and influence of global economic recession. At the end of the work there are presented alternative instruments for minimizing credit risk and their comparison with insurance products.

Thesis Portfolio Credit Risk Modeling focuses on state-of-the-art credit models largely implemented by banks into their banking risk-assessment and complementary valuation system frameworks. Reader is provided in general with both theoretical and applied (practical) approaches that are giving a clear notion how selected portfolio models perform in real-world environment. Our study comprises CreditMetrics, CreditRisk+ and KMV model. In the first part of the thesis, our intention is to clarify theoretically main features, modeling principles and moreover we also suggest hypotheses about strengths/drawbacks of every scrutinized model. Subsequently, in the applied part we test the models in a lab-environment but with real-world market data. Noticeable stress is also put on model calibration. This enables us to con firm/reject the assumptions we made in the theoretical part. In the very end there follows a straightforward general overview of all outputs and a conclusion.

This diploma thesis in the first part discusses the importance of export, and especially its support from the goverment. There is characterized credit risk and the possibility of insurance. The theoretical part introduce an international agreement concluded OECD Consensus, which sets the rules for export credit insurance with the support. The practical part is devoted to an analysis of the insurance company EGAP in the years 2007 - 2009. Insurance contracts are analyzed according to the insurance product and territories. In conclusion there is a recommended procedure for the exporter in arranging insurance.

The aim is to monitor the situation in the credit market, focusing mainly on non-banking sector and make comparison with the banking sector. The paper will also address the problem of indebtedness. It will also address the possibility of recovery, under Czech law.

Na atual sociedade de consumo de massa, a questão da distribuição dos riscos nas relações contratuais adquiriu grande importância, sobretudo devido ao surgimento dos novos riscos e à especialização das atividades econômicas, fatores que acirraram a assimetria de informações e polarizaram ainda mais as relações contratuais. Na atividade de concessão de crédito, esse processo ocorre com maior intensidade, tendo em vista a sofisticação dos mercados e dos instrumentos financeiros, os novos métodos de cálculo, prevenção e distribuição dos riscos e a ampliação do fornecimento de crédito para a massa de consumidores pessoas físicas a chamada democratização do crédito. Nesse contexto, o presente trabalho tem por objetivo a fixação dos limites legais para a distribuição e a transferência dos riscos ao consumidor nos contratos de crédito bancário com pessoas físicas. Será argumentado que a forma de distribuição dos riscos mais adequada ao sistema de defesa do consumidor é aquela feita por intermédio das taxas de juros, desde que atendido o requisito da transparência do processo de formação do preço do crédito (taxa de juros). Para garantir a correta mensuração dos riscos, serão destacados três mecanismos, quais sejam: 1) o cumprimento do dever de informação; 2) a intervenção dos agentes reguladores e supervisores do sistema financeiro Conselho Monetário Nacional e Banco Central; e 3) o controle judicial do risco superestimado. Em seguida, serão analisados os mecanismos de transferência dos riscos contratuais externos à formação do preço, tais como a estipulação de comissão de permanência fixada segundo a taxa média de mercado, com o objetivo de afastar o risco de variação de taxas de juros; a indexação do contrato em moeda estrangeira, com o objetivo de transferir o risco de variação cambial; a cobrança de tarifas que acobertam riscos específicos, sobretudo quanto a riscos operacionais e de inadimplência; e a estipulação de cláusulas de exoneração de responsabilidade, como forma de afastar o risco de fraudes ou de danos causados aos consumidores. Essas formas exógenas de transferência dos riscos do crédito devem ser consideradas ilícitas, sobretudo nos contratos de crédito ao consumidor pessoa física, por violarem o dever de informação e por tornarem as contraprestações excessivamente onerosas, permitindo que o consumidor assuma riscos desconhecidos ou para ele imprevisíveis. / In the current society of mass consumption, the question of the distribution of risks in contracts acquired great importance, especially due to the emergence of new risks and specialization of economic activities, factors that incited information asymmetry and polarized even further contractual relationships. This process occurs with greater intensity in the activity of lending, given the sophistication of markets and financial instruments, the new methods of calculation, prevention and distribution of risks and the expansion of credit supply to the mass of individual consumers - the so-called democratization of credit. It will be argued that the form of risk distribution more adequate to the consumer defense law is the one made through interest rates, since it met the requirement of transparency in the pricing credit process (composition of interest rate). To guarantee the correct risk measurement, three mechanisms will be highlighted: 1) the enforcement of disclosure obligation; 2) the intervention of regulatory and supervisors agents of the financial system - the National Monetary Council and the Central Bank, and 3) judicial control of the overestimated risk. Then the mechanisms of contractual risk transfer outside the pricing credit will be analyzed, such as the stipulation of commission for the delay fixed \"according to the average market rate\" to eliminate the risk of fluctuating interest rates; the indexation of the contract in foreign currency, with the objective of transferring the risk of changes in exchange rate; the payment of fares that cover specific risks, particularly in terms of operational risks and default risks; and the stipulation of contractual terms liability release as a way to avoid the risk of fraud or damage to consumers. These exogenous forms of credit risk transfer should be considered illegal, especially in contracts with individual consumers, for violation of the disclosure requirement and for generating an excessive burden for the contract, allowing the consumer to take unknown and unpredictable risks.

Thesis (M.M. (Finance & Investment))--University of the Witwatersrand, Faculty of Commerce, Law and Management, Graduate School of Business Administration, 2013. / This research work explores the risks that microfinance institutions (MFIs) face in their operations and the risk management strategies they adopt to mitigate their risks. Microfinance institutions serve some of the world’s most financially challenged population who otherwise would not have access to banking services. Risk management within the context of microfinance banking has gained importance within the last decade due partly to the fact that most MFIs are adopting business/profitability principles in their operations. Also, due to the recent financial crisis, MFI cannot afford to be indifferent to risk management practices in the battle for survival, financial sustainability and self-sufficiency. The data for this study is from both secondary and primary sources; 48 MFIs in Ghana responded to a questionnaire made up of 25 questions. Analysis of the responses obtained was done using Chi-Square test of equal proportions, P-values and other descriptive statistics. The Analysis found that the microfinance institutions surveyed are aware of the types of risk inherent in their line of business and do in varying ways employ some form of risk management strategies to mitigate losses and enhance profitability. Since credit granting stands at the core of the operations of MFIs, the management of risk as a result of the credits extended is crucial for their survival and profitability.

Thesis advisor: Philip Strahan / In my first essay, I study how the rise of non-bank loan investment from CLOs, mutual funds, and hedge funds influenced contracting relationships between firms and their senior lenders. Contrary to common perception that non-bank investors diluted the incentive for banks to monitor firms, I find evidence that bank underwriters embraced tighter contracts to mitigate agency and holdout problems associated with less-informed and dispersed non-bank investors. While recent studies show that non-bank loan investors lowered the cost and expanded the availability of capital ex ante, I conclude that tighter contracts also assigned stronger control rights to lenders and imposed higher renegotiation costs to firms ex post. In my second essay, we examine the drivers of M&A activity in bankruptcy. M&A in bankruptcy is counter-cyclical, and is more likely when the costs of financing a reorganization are greater than financing costs to a potential acquirer. Consistent with a senior creditor liquidation bias, the greater use of secured debt leads to more sales in bankruptcy - but, this result holds only for sales that preserve going concern value. We also show that overall creditor recovery rates are higher, and unsecured creditor recoveries and post-bankruptcy survival rates are not different, when bankrupt firms sell businesses as going concerns. Finally, in my third essay, we examine whether corporate credit rating analysts are rewarded based on ratings accuracy or bias. Overall, accurate analysts are more likely to be promoted. However, analysts who disproportionately downgrade firms compared to the corresponding S&P rating are less likely to be promoted despite being more accurate than analysts who disproportionately upgrade firms. Further, analysts whose rating decisions lead to significantly negative announcement returns are also less likely to be promoted. We conclude that Moody's rewards accurate analysts but punishes analysts for negative bias. / Thesis (PhD) — Boston College, 2015. / Submitted to: Boston College. Carroll School of Management. / Discipline: Finance.

Research thesis submitted in partial fulfilment of the requirements for the degree Masters of Management in Finance and Investment Faculty of Commerce, Law and Management Wits Business School University of Witwatersrand June 2017 / Sovereign credit ratings provide a summary of the economic conditions of a particular country, and are a representation of the ability and willingness of a country to make its debt payments as they fall due. These ratings provide an indication of the cost of borrowing in that country, so a country would like to obtain the highest possible credit rating. These ratings are provided by independent agencies who use their own systems to provide a rating and an outlook. Credit ratings are important as they provide information to investors on the potential investability and access to financial markets of that particular country. The problem found by some literature is the reliability of ratings in emerging markets as investors perceive these markets to be riskier in nature. In this paper, the aim was to identify what the different factors that the two big agencies, Moody’s and Standard and Poor’s use when rating a country. This is done through using a multiple regression model on 5 emerging economies from different continents from 1994 to 2015, based on annual data. The first step was to find out what are the macro-economic variables that have strong correlations with the agencies, and the results show that external balances as a % of GDP and the GDP growth have low correlations with the ratings. The regression analysis also shows that Moody’s takes the inflation rate into consideration when rating a country but Standard and Poor’s does not. The paper also wanted to identify the effects of ratings on markets, and this was done through the effect of ratings on the interest rate spreads. The results show that the rating differential, which was the ratings from Moody’s subtracted from the ratings of Standard and Poor’s, affect the interest rate spreads negatively, therefore a better rating should reduce the spread and have a positive effect on the financial markets. / MT2017

A research project submitted to Wits Business School in partial fulfilment of the requirements for the degree of Master of Management in Finance & Investment February 2016 / South Africa has one of the highest income inequalities in the world. Although evidence suggests that access to secured credit has a positive impact on improving individuals’ earnings and reducing income inequality, secure credit has not been readily available to everyone in South Africa owing to past injustice of apartheid. This provided a business opportunity to credit providers who rolled out numerous unsecured lending financial products into the market. These are products historically target middle to low-income earners who don’t qualify for secured loans due to lack of collateral or good credit history. Small and Medium Enterprises (SMEs) also resort to these products when financial institutions don’t grant them secured loans because of their imbedded risky nature. Capitec Bank and African Bank are the biggest players in the South African unsecured lending market. During the 2008 worldwide economic and financial crisis, many people lost their jobs in South Africa. The impact of the crisis continued to be felt way after the modest recovery achieved globally and domestically. As a result, most individuals could no longer afford mortgages and basic needs and services because of their compromised economic situation. Henceforth majority of individuals resorted to alternative income means for their survival. For most individual, unsecured lending was viewed as the quickest way of securing additional income to supplement their minimal or no income. This resulted in exponential countrywide growth in unsecured loans. As unsecured lending attract a higher interest rate than secured loans, other formal banking institutions have been attracted to this market resulting in compounded overall growth of the loan book. This research paper aims to explore the unsecured lending landscape in South Africa with the intension of discovering how it has evolved over the years. It also explores whether unsecured lending has been a helping tool to the less fortunate through its impact on their subjective wellbeing. The findings of the research indicated that individuals with unsecured loans have a lower subjective view of their personal wellbeing when compared to those without unsecured loans. However, unsecured loans improve individuals’ personal wellbeing through its direct effect on individuals’ health, educational status and income. / GR2018