Journal of Financial Stability最新文献

英文中文

Geopolitical risk and corporate maturity mismatch

IF 6.1 2区经济学 Q1 BUSINESS, FINANCE

Journal of Financial Stability

Pub Date : 2025-03-27 DOI: 10.1016/j.jfs.2025.101408

Man Wang , Xueting Wang

This paper explores how geopolitical risk affects corporate maturity mismatch using a sample of Chinese listed corporations. We find that geopolitical risk significantly exacerbates corporate maturity mismatch. Specifically, GPR increases corporate long-term investment and short-term debt, while decreasing corporate short-term investment and long-term debt. Further, the impact of GPR is amplified by R&D investment, industry competitiveness, and financial constraint, but weakened by corporate credit quality. The results of the mechanism test suggest that geopolitical risk exacerbates corporate maturity mismatch by increasing corporate information asymmetry and default risk. Additionally, we find that the impact of GPR on corporate maturity mismatch exhibits industry heterogeneity, and the positive effect of geopolitical risk on corporate maturity mismatch is more significant for high-growth corporations, non-state-owned corporations, small corporations, multinational corporations, and capital-intensive corporations. Finally, based on the extended Fama-French models, we construct two firm-level GPR indicators and the results indicate that individual GPR exacerbates maturity mismatch. Our paper enriches the research on the factors affecting maturity mismatch and helps corporations better manage operational and uncertainty risks.

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引用次数: 0

Regional bank failures and volatility transmission 地区性银行倒闭与波动传导

IF 6.1 2区经济学 Q1 BUSINESS, FINANCE

Journal of Financial Stability

Pub Date : 2025-03-20 DOI: 10.1016/j.jfs.2025.101404

William D. Lastrapes , Thomas F.P. Wiesen

We estimate the effect of the spring 2023 failures of Silicon Valley Bank and Signature Bank on the “connectedness” of US bank stock return volatilities using the forecast error variance decomposition framework of Diebold and Yilmaz (2012, 2014) and Lastrapes and Wiesen (2021). Using split-sample and time-varying VAR methods, we find that those failures significantly increased spillovers across a sample of surviving regional banks, but had only small and temporary effects on spillovers across systemically important too-big-to-fail banks. Our main findings imply that regulatory policy toward systemically important banks has been credible but that additional oversight of regional banks should be considered.

引用次数: 0

CFO social networks and corporation taxation 首席财务官社交网络与公司税收

IF 6.1 2区经济学 Q1 BUSINESS, FINANCE

Journal of Financial Stability

Pub Date : 2025-03-16 DOI: 10.1016/j.jfs.2025.101405

Ming Fang , Qiang Wu , Xin (Emma) Xu , Zejiang Zhou

Despite the significance of social networks in influencing firm behavior, research on their impact on corporate tax behavior is limited. In this paper, we construct social networks of CFOs from U.S. companies based on their employment history, education, and non-professional activities. We find that firms with more socially connected CFOs have lower effective tax rates (ETR) compared to firms with less socially connected CFOs. This effect is more pronounced when corporate governance is weaker and managers have higher incentives. Furthermore, a firm's ETR decreases as CFO centrality increases. We do not observe similar results regarding the connectedness of boards of directors. Additionally, firm pairs exhibit similar ETRs when their CFOs are socially connected, suggesting an exchange of tax-related information among CFOs through their social networks. We also find that the past ETRs of firms with central CFOs predict the ETRs of firms with non-central CFOs. This indicates that less socially connected CFOs tend to follow the tax planning strategies of their more socially connected counterparts. Overall, our findings indicate that more socially connected CFOs possess more relevant information and resources regarding tax planning, leading to the adoption of more aggressive tax strategies compared to their less socially connected counterparts.

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引用次数: 0

Movable assets as collateral in debt financing and effects on trade credit: Evidence from collateral law reforms

IF 6.1 2区经济学 Q1 BUSINESS, FINANCE

Journal of Financial Stability

Pub Date : 2025-03-16 DOI: 10.1016/j.jfs.2025.101406

Xiao Li , Jeffrey Ng , Walid Saffar

Using the staggered adoption of collateral law reforms across Europe, we examine their effects on trade credit financing. We find that firms in countries that adopt such reforms receive less trade credit, consistent with suppliers viewing these firms as less creditworthy. Moreover, this decrease in trade credit is more pronounced for firms and industries with more movable assets, for financially constrained firms, and for firms in countries with strong legal enforcement, indicating that collateralization of movable assets drives this relation. Our findings suggest that the use of movable assets as collateral in bank borrowing increases supplier risks and decreases demand for trade credit, thus discouraging its use.

引用次数: 0

The origin of financial instability and systemic risk: Do bank business models matter?

IF 6.1 2区经济学 Q1 BUSINESS, FINANCE

Journal of Financial Stability

Pub Date : 2025-03-15 DOI: 10.1016/j.jfs.2025.101403

Rym Ayadi , Paola Bongini , Barbara Casu , Doriana Cucinelli

Using a large sample of European listed banks, we investigate the relationship between a bank’s business model and systemic risk between 2005 and 2020, a period which includes various episodes of instability. Our findings indicate that, during tranquil periods, banks with different business models exhibit similar sensitivity to systemic risk. However, during periods of instability, the type of business model becomes critical: investment banks contribute more to and are more exposed to systemic risk. Distinguishing between endogenous and exogenous crises, our results reveal that market-oriented banks contribute more to systemic risk when instability is endogenous to the financial sector. Conversely, focused retail banks consistently show lower contributions and exposures to systemic risk. Additionally, our findings highlight the importance of business model migrations in reducing systemic risk. Banks transitioning from diversified to more retail-oriented models reduce their systemic risk, whereas migrations in the opposite direction do not exhibit the same benefit. These findings underscore the importance of maintaining diverse business models in the banking sector to enhance financial stability.

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引用次数: 0

Bank recovery and resolution planning, liquidity management and fragility

IF 6.1 2区经济学 Q1 BUSINESS, FINANCE

Journal of Financial Stability

Pub Date : 2025-02-25 DOI: 10.1016/j.jfs.2025.101395

Luca G. Deidda , Ettore Panetti

We study how regulation shapes the interaction between financial fragility and bank liquidity management, and propose a rationale for the complementarity between bank recovery and resolution planning. To this end, we analyze an economy in which a resolution authority arranges a bank resolution plan to suspend deposit withdrawals and create a “good bank” at a cost in the event of a depositors’ run. In such a framework, banks find it optimal to establish recovery plans in advance, specifying how to manage liquidity during runs. However, such plans are time inconsistent, and resolution authorities need powers to force their implementation at times of financial fragility.

引用次数: 0

Determinants of global loan pricing: Creditor rights or country size?

IF 6.1 2区经济学 Q1 BUSINESS, FINANCE

Journal of Financial Stability

Pub Date : 2025-02-18 DOI: 10.1016/j.jfs.2025.101396

Manthos D. Delis , Maria Iosifidi

Using global data on syndicated loans, we show that any negative effect of stronger creditor rights on loan spreads, as identified in the prior literature (Qian and Strahan, 2007; Bae and Goyal, 2009), disappears once we include a single country characteristic: country size. This finding is robust to several identification methods, both global samples and within-country changes in creditor rights, different panel spans, and hundreds of control variables. We identify that key origins of the effect of country size on loan pricing are ethnic fractionalization and within-country heterogeneity in economic preferences, which create country risk.

引用次数: 0

The digital dilemma: Corporate digital transformation and default risk

IF 6.1 2区经济学 Q1 BUSINESS, FINANCE

Journal of Financial Stability

Pub Date : 2025-02-14 DOI: 10.1016/j.jfs.2025.101393

Kai Wu, Yufei Lu

This study investigates the association between corporate digital transformation and default risk for a sample of Chinese-listed firms from 2009 to 2022. We find a robust positive association between digital transformation and corporate default risk. Further tests reveal the destabilizing impact of digital adoption strengthens under greater competition, human capital intensity, shareholder expropriation, and weak monitoring. The additional analysis points to resource misallocation and managerial manipulations as two potential channels propagating distress. We show that digital transformation correlates with escalated asset impairments and financial frauds. Our study provides evidence that digital transformation strategies entail underappreciated risks to financial stability.

引用次数: 0

Bank diversity and financial contagion

IF 6.1 2区经济学 Q1 BUSINESS, FINANCE

Journal of Financial Stability

Pub Date : 2025-02-14 DOI: 10.1016/j.jfs.2025.101392

Emmanuel Caiazzo , Alberto Zazzaro

This paper analyzes financial contagion in a banking system where banks are linked to each other by interbank claims and common assets. We find that asset commonality makes banking systems more vulnerable to idiosyncratic liquidity shocks and helps to determine which interbank network structures are resistant to contagion. When the degree of commonality is homogeneous across banks, the complete interbank network, in which each bank borrows evenly from all the others, displays the usual robust-yet-fragile property. However, in the more general case of heterogeneous common asset holdings the complete interbank network is less resilient than other incomplete networks but not necessarily the most fragile. We also show that the degree and variability of asset commonality between banks and the way this intertwines with the cross-holdings of interbank deposits have important implications for macroprudential regulation.

引用次数: 0

Suspensions of payments and their consequences

IF 6.1 2区经济学 Q1 BUSINESS, FINANCE

Journal of Financial Stability

Pub Date : 2025-02-14 DOI: 10.1016/j.jfs.2025.101391

Qian Chen , Christoffer Koch , Gary Richardson , Padma Sharma

Ongoing financial innovation raises the specter of banking and payment crises. Little aggregate evidence exists on the repercussions of substantial suspensions of payments. State-level experiments fill this gap. Four times in the last forty years, U.S. governors suspended payments from state-insured depositories. Rhode Island’s deposits crisis (1991), which was large, prolonged, and occurred during a recession, substantially lengthened and deepened the downturn. Deposits freezes in Nebraska (1983), Ohio (1985), and Maryland (1985), which were short and occurred during expansions, had little macroeconomic impact. Data sparsity inhibits analysis of these events with standard methods. To perform inference, we develop a novel Bayesian method for synthetic control, which generates output useful for policymakers and theorists. Our findings suggest policies that ensure institutions continue to process payments on a business-as-usual basis at all times have substantial value.

引用次数: 0

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