The market conditions in the banking sector, the corporate governance structure of banks, and the financial accounting practices have been highlighted among the key causes of the global financial crisis of 2007-2010. In this thesis, I analyse the ‘dark side' of competition by casting the spotlight on the relationship between competition, corporate governance, financial stability, and financial misreporting. I also bring corporate governance into the fray by analysing its link to financial misreporting. Probing the interplay between banking sector competition, corporate governance, financial stability and financial misreporting provides a fantastic setting to tap into and provide unique insights across the accounting, banking and finance domains. In putting together this piece of work, I extracted data from sources including Bankscope, Compustat, SEC enforcement releases and the World Bank Doing Business survey among others. In the 1st chapter, I regress financial stability proxies against various competition/concentration proxies using the GMM estimator with an instrumental variable technique to address potential endogeneity. In the 2nd chapter I use difference-in-difference analysis to analyse how changes in the competitive landscape in the US financial services industry instigated by the financial crisis as an exogenous factor led to an increase in misreporting incidences. The 4th chapter is an evaluation of how five corporate governance dimensions impacted on financial misreporting in US commercial banks subject to SEC enforcement actions from 2000 to 2016. I uncover strong evidence to support the competition-fragility view, without yet being able to disprove the competition-stability view. My results suggest that greater banking competition yields riskier loan portfolios, but this increased risk is more than offset by banks holding higher capital and liquidity thresholds. I also study the link between competition and incidences of financial misreporting in the US financial services industry and the results suggest a significantly positive association between competition and financial misreporting. Furthermore, there is evidence that an exogenous increase in competition because of the financial crisis also fuelled financial misreporting incidences in the financial services industry. I then investigate the impact of corporate governance on financial misreporting in US commercial banks subject to SEC enforcement actions. My results are mixed across the five corporate governance dimensions utilised for this study. Consistent with the ‘agency cost' hypothesis, I find a negative association between board size and financial misreporting, yet CEO power asserts a positive association with financial misreporting in violation of both the ‘stewardship' and ‘entrenchment' hypotheses. The equity-based portion of executive compensation is negatively related with misreporting, whereas there is a positive association between the cash-based portion and misreporting. My research not only contributes to literature on competition, market power, bank risk, financial stability, corporate governance, and financial misreporting; but also provide several practical and theoretical implications for regulators, academics, governments and policymakers on the effective and efficient regulation of the governance and competitive landscapes in financial services. I specifically shine the spotlight on emerging literature on the pervasive effects (dark side) of competition from a purely financial services perspective and within the context of the global financial crisis of 2007-2010.

This thesis deals with the problem of recent financial crisis and possible ways to prevent it from returning in the future. The basic document here deals with the changes made by US government and their comparison with set of laws from the time of the Great Depression. This comparison results into proposal of some further changes. The last part deals with the systematic flaw of credit expansion a offers a solution based on principles of the Austrian school modified to correspond more closely with current system

This study aims to estimate the ratio of non-performing loans to total loans (NPL ratio), its determinants and its response to different macroeconomic shocks. As the last financial crises had negative impact on the economy of many countries of the world, we have to strive for preventive measures that would help us to fully or at least partly avoid future crises. It should be achieved by sound risk management practices of all financial institutions. Important part of these risk management practices shall be - among others - stress tests that would test the health of the institution under severe conditions and negative shocks. For this study the vector autoregression model (VAR methodology) is used to see the response of credit risk (in terms of NPL ratio) to macroeconomic shocks in the Czech Republic. The variables used for this study are quarterly time series data of the period from 2002 to 2011 (GDP, inflation rate, unemployment rate, koruna exchange rate (CZK/USD), and interest rate). For each of these variables the impulse response function was created, to show the impact of macroeconomic shocks and the speed of adjustment of NPL ratio to these shocks. Keywords: Financial Crises, Credit Risk Management, Non-performing loans, Macroeconomic Shocks, Czech Republic, VARs

Bakgrund och problemdiskussion: Bankkrisen under 1990-talet och den globala krisen mellan 2007 -2009 har kommit som en kalldusch för de svenska storbankerna, Handelsbanken, Nordea, SEB och Swedbank, vilket har lett till betydande kreditförluster. Kreditförluster är den vanligaste orsaken till bankernas ekonomiska problem vid en finansiell kris då återbetalningsförmågan hos kredittagare försämras, samtidigt som det talar för att finansiella kriser är ett återkommande fenomen idag. Syfte: Syftet med detta examensarbete är att se vilka åtgärder i kreditprocessen som gjorts efter finanskriserna i de fyra svenska storbankerna samt även se hur tidigare gjorda åtgärder stod sig under den senaste krisen. Vår ambition med uppsatsen är att de resultat vi får fram ska kunna användas av bankerna i kreditprocessen så att de påverkas mindre vid framtida eventuella kriser. Metod: Uppsatsen grundar sig på en kvalitativ metod med respondenter med gedigen erfarenhet och ansvarspositioner inom storbankernas kreditprocesser och praktisk kunnighet gällande storbankernas påverkan av finansiella kriser. Slutsats: De svenska storbankernas kreditprocesser stod sig bra under den senaste globala krisen i jämförelse med bankkrisen under 1990-talet, orsaken till det är de åtgärder som gjordes i kreditprocessen efter bankkrisen inom banken. Kreditprocessen har under de senaste 20 åren gått från en delvis oprövad och snabb kreditprocess till att idag vara en mer sofistikerad och tungarbetad kreditprocess som ställer högre och strängare krav på kredittagarna. För att få kreditprocessen helt vaccinerad mot finanskriser anser vi att det behövs mer mod och integritet hos kredithandläggare för att på bästa sätt kunna förmedla den rådande situationen på ett korrekt och snabbt sätt. / Background and problem discussion: The banking crisis during the 1990s and the global financial crisis between 2007-2009 came as a cold shower for the four biggest Swedish banks, Handelsbanken, Nordea, SEB and Swedbank and led to significant credit losses. Credit losses are the most common financial problems of banks during financial crises, because the repayment ability of borrowers can deteriorate. In addition, financial crises seem to be a recurring phenomenon today. Aim: The objective of this paper is to see what kind of changes that have been made after financial crisis, and also see how the previous changes during the recent banking crisis stood during the recent global crisis. Our ambition with the paper is that the results we obtain can be used by the Swedish banks credit process so that they are less vulnerable in the future. Method: The paper is based on a qualitative approach with respondents with extensive experience and influence in the credit process. The respondents in the four biggest banks have practical experience of the banks impact after the financial crises. Conclusion: The biggest Swedish banks credit process did well during the last financial crisis in comparison with the banking crisis in the 1990s. One of the reasons are the changes made after the previous crisis related to credit processes.. The credit process has, during the past 20 years, gone from a partially untested and fast-credit process towards a more sophisticated and heavy credit process which puts more responsibility on the borrowers. In order to fully protect banks against future financial crises, we believe more courage and integrity among credit managers is necessary. Upcoming threats needs to be reported in a proper and fast way.

No description available.

<p>This dissertation presents two essays on Markov-Switching dynamic stochastic general equilibrium models.</p><p>The first essay is "Perturbation Methods for Markov-Switching Models," which is co-authored with Juan Rubio-Ramirez, Dan Waggoner, and Tao Zha. This essay develops an perturbation-based approach to solving dynamic stochastic general equilibrium models with Markov-Switching, which implies that parameters governing policies or the environment evolve over time in a discrete manner. Our approach has the advantages that it introduces regime switching from first principles, allows for higher-order approximations, shows non-certainty equivalence of first-order approximations, and allows checking the solution for determinacy. We explain the model setup, introduce an iterative procedure to solve the model, and illustrate it using a real business cycle example.</p><p>The second essay considers a model with financial frictions and studies the role of expectations and unconventional monetary policy during financial crises. During a financial crisis, the financial sector has</p><p>reduced ability to provide credit to productive firms, and the central bank may help lessen the magnitude of the downturn by using unconventional monetary policy to inject liquidity into credit markets. The model allows agents in the economy to expect policy changes by allowing parameters to change according to a Markov process, so agents have expectations about the probability of the central bank intervening during a crisis, and also have expectations about the central bank's exit strategy post-crisis. </p><p>Using this Markov Regime Switching specification, the paper addresses three issues. First, it considers the effects of different exit strategies, and shows that, after a crisis, if the central bank sells off its accumulated assets too quickly, the economy can experience a double-dip recession. Second, it analyzes the effects of expectations of intervention policy on pre-crisis behavior. In particular, if the central bank commits to always intervening during crises, there is a loss of output in pre-crisis times relative to if the central bank commits to never intervening. Finally, it considers the welfare implications of committing to intervening during crises, and shows that committing can raise or lower welfare depending upon the exit strategy used, and that committing before a crisis can be welfare decreasing but then welfare increasing once a crisis occurs.</p> / Dissertation

This paper focuses on stock markets, including Portugal¡BItaly¡BIreland¡BGreece and Spain, and these are named PIGS by economists. Furthermore, we add the other three countries, U.S.A.¡BU.K. and Germany in this paper for investigating the dependence structure in the stock markets between these countries during the period 2001-2011. We implement a regime-switching copula model based on Gaussian copula, which uses a GARCH specification for the marginal distributions and the Gaussian copula for the joint distribution. Our method combines copulas and regime-switching models to demonstrate dependence sructures in stock markets between these countries. Based on this paper, we have two reports for international investors. First, if the dependency changes over time, the returns of portfolio diversification may be prone to diversification disasters, and the international investors' degrees of diversification can cause higher systemic risk in the period of financial crisis. Second, the phonomenon of the asymmetric dependence exists in financial markets, and we conclude that non-diversification may be better than diversification in the period of financial crisis.

Freie Univ., Diss.--Berlin, 2006.

Diss. Stockholm : Handelshögsk., 2003.

published_or_final_version / Housing Management / Master / Master of Housing Management