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Working Paper
More on the differences between reported and actual U.S. central bank foreign exchange intervention
An analysis of the differential impacts of reported and actual U.S. foreign exchange intervention on the mean and conditional variance of the Deutschemark-to-dollar and yen-to-dollar exchange rates. For part of the sample period, the impact of intervention on the variance of the exchange rates is shown to depend on whether the intervention was reported.
Conference Paper
Capital requirements and optimal bank portfolios: a reexamination
Working Paper
Deposit insurance and the cost of capital
The impacts of deposit insurance and forbearance on the costs and value of uninsured deposits and equity capital are shown under three regimes.
Working Paper
Central bank intervention and overnight uncovered interest rate parity
This paper considers the impact of U.S. and German central bank intervention on the risk premium in forward foreign exchange markets.
Working Paper
Intervention and the risk premium in foreign exchange rates
An analysis of how central-bank exchange-market intervention can affect both the level of exchange rates and the risk premium in asset returns, showing how the risk premium is related to the conditional variances of intervention and other exogenous processes.
Journal Article
Bank capital requirements and the riskiness of banks: a review
A study of the impact of capital requirements on bank portfolio decisions, showing that the variance of earnings and the incentive to increase leverage are reduced with risk- and leverage-related deposit rates, and that the impact of increased capital requirements on portfolio behavior is generally ambiguous.
Journal Article
Depositor-preference laws and the cost of debt capital
Under depositor-preference laws, depositors' claims on the assets of failed depository institutions are senior to unsecured general-creditor claims. As a result, depositor preference changes the capital structure of banks and thrifts, thereby affecting the cost of capital for depositories. Depositor preference has no impact on the total value of banks and thrifts, however, unless deposit insurance is mispriced.
Working Paper
Depositor preference legislation and failed banks' resolution costs
An examination of the empirical impact of depositor preference legislation (DPL) on resolution type and resolution costs for commercial banks. It focuses on the impact of state DPL statutes, using FDIC and call-report data on resolution costs and types for all operating FDIC-BIF insured commercial banks that closed or required FDIC financial assistance from January 1986 through December 1992.
Journal Article
Public subsidies for private purposes
A discussion of the use of municipal debt issues to fund publicly supported stadiums, focusing on the role of federal tax exemption as a hidden subsidy in reducing local funding costs and on the rationale for seeking public subsidies of private, local facilities.
Working Paper
Optimal financial structure and bank capital requirements: an empirical investigation
This paper presents an empirical analysis of the determinants of the leverage ratios (the book value of liabilities divided by the total of the book value of liabilities' and the market value of equity) for 232 bank holding companies for December 1986, June 1987, and December 1987. Many theoretical models of bank behavior assume that bank capital requirements will be binding, and empirical research has generally shown that almost all- banks will meet capital guidelines. However, if the optimal leverage ratios differ among banks, then banks' responses to changes in capital requirements or to ...