Near integration,bank reluctance,and discount window borrowing

This study puts forth stationarity considerations in explaining the observed breakdown between aggregate Discount Window borrowing and the spread between the Federal Funds rate and the discount rate during the post-1987 period. Tests with biweekly data indicate stationarity for adjustment borrowing, but cannot reject the unit root for the spread. The Goodfriend–Dutkowsky dynamic implicit cost formulation can accommodate the contrasting stationarity properties. Structural restrictions are compatible with stationary borrowing and a stationary or near integrated spread. While empirical findings from the static model indicate greater bank reluctance to borrow over time, the dynamic model gives considerably less support.     

Mimicking insider trades

We examine whether outside investors mimic insider trades by analyzing the daily transactions of foreign institutional investors (FII) in the Indian emerging market. We find that the value relevance of insiders' opportunistic buy trades is much higher in our context relative to that reported for developed markets. More importantly, we find that FII mimic opportunistic buy trades, which is more pronounced for firms that are informationally more opaque or have lower corporate governance quality. A long-short strategy based on FII's transactions after opportunistic trades generates an additional abnormal return of approximately 29% annually, compared to transactions based on routines trades.     

银行卡欺诈问题及其对策

银行卡欺诈问题一直以来都受到业界关注。如何制定反欺诈策略是目前反欺诈部门的主管面临的一项特殊挑战。     

Investment and insider trading

We study insider trading in a dynamic setting. Rational, butuninformed, traders choose between investment projects withdifferent levels of insider trading. Insider trading distortsinvestment toward asset with less private information. However,when investment is sufficiently information elastic, insidertrading can be welfare-enhancing because of more informativeprices. When insiders repeatedly receive informations, theytrade to reveal it when investment is information elastic becausegood news increases investment and hence future insider profits.Thus, more information is revealed and uninformed agents areexploited less frequently by insiders. Both effects are Pareto-improving.Finally, we consider various insider-trading regulations.     

Incentive problems and the pattern of international risk sharing

This paper analyzes the implications of moral hazard and a lack of contract enforcement for risk sharing across countries and regions. We demonstrate that both incentive problems can considerably restrict efficient risk sharing. However, we show that the cross-sectional risk sharing component is much more affected than the intertemporal component. We argue that this may help to explain several stylized facts of international risk sharing, such as the low degree of insurance against permanent shocks.     

Determinants of corporate borrowing

Many corporate assets, particularly growth opportunities, can be viewed as call options. The value of such ‘real options’ depends on discretionary future investment by the firm. Issuing risky debt reduces the present market value of a firm holding real options by inducing a suboptimal investment strategy or by forcing the firm and its creditors to bear the costs of avoiding the suboptimal strategy. The paper predicts that corporate borrowing is inversely related to the proportion of market value accounted for by real options. It also rationalizes other aspects of corporate borrowing behavior, for example the practice of matching maturities of assets and debt liabilities.     

银行交易系统性能问题的处理方法

随着银行业务的快速发展,后台数据规模不断扩大,应用逻辑日趋复杂．客户并发访问数显著增多．有可能超出交易系统最初设定的容量．因而我国商业银行承担的确保交易系统稳定运行的压力越来越大。为此．本文主要从技术角度讨论银行交易系统性能问题的处理方法。     

Are insider trades informative?

We examine insider trading activities of all companies tradedon the NYSE, AMEX, and Nasdaq during the 1975-1995 period. Ingeneral, very little market movement is observed when insiderstrade and when they report their trades to the SEC. Insidersin aggregate are contrarian investors. However, they predictmarket movements better than simple contrarian strategies. Insidersalso seem to be able to predict cross-sectional stock returns.The result, however, is driven by insider's ability to predictreturns in smaller firms. In addition, informativeness of insiders'activities is coming from purchases, while insider selling appearsto have no predictive ability.     

Government borrowing and monetary accommodation

This paper re-examines the relationship between Treasury borrowing and monetary growth examined previously with annual data by Barro, Niskanen and Hamburger and Zwick. Our analysis, based on quarterly data, produces evidence of a positive and significant impact of total Treasury borrowing upon the growth of the monetary base for the 1954/I–1961/II and 1961/III–1974/IV periods but an insignificant coefficient for the Barro expenditure variable. When the coefficient instability during the 1961/III–1980/IV period is corrected by a dummy variable technique the debt coefficient is positive and significant and remains stable for this two decade period.     

Legal insider trading and market efficiency

Does legal insider trading contribute to market efficiency? Using refinements proposed in the recent microstructure literature, we analyzed the information content of legal insider trading. We used data on 2110 companies subject to 59,244 aggregated daily insider trades between January 1995 and the end of September 1999. Our main finding is that, even though financial markets do not respond strongly in terms of abnormal returns to insider trading activities, the significant change in price sensitivity to relative order imbalance due to abnormal insider trades reveals that price discovery is hastened on insider trading days.     

The political economy of SME financing and Japan's regional bank problems

Japan's regional bank problems are accumulating non-performing loans, lack of diversification, and the absence of effective competition. We argue that the problems should be addressed in conjunction with the financing of small and medium enterprises (SMEs) and the political interests of the central and regional governments. The political interests may necessitate funding suboptimal investment projects of regional SMEs or keeping non-performing SMEs alive. In particular, loan repayment guarantees reduce the banks' incentives to screen loan applications, increase the chances that poorer quality projects get funded, and harm competition by deterring entry of other banks. We also offer some policy implications.     

Changes in earnings announcement tone and insider sales

The evidence from prior literature suggests that insider trading is related to firms' reported financial results and disclosure choices. I contribute to the literature by examining the association between narrative disclosure in earnings announcements and insider trading. Specifically, I hypothesize and find a positive association between changes in the optimistic tone of earnings announcements and CEOs' subsequent equity sales. In addition, I hypothesize and find that this relation is mitigated by the Sarbanes–Oxley Act and litigation risk. CEOs' financial gain from selling equity after more optimistic earnings announcements is small relative to their total compensation.     

The certification role of insider participation in PIPEs

Review of Quantitative Finance and Accounting - In this paper we provide new insights into the motives underlying insider participation in private investments in public equity (PIPEs) by...     

Disproportionate insider control and firm performance

The effect of disproportionate insider control on firm performance is ambiguous. Disproportionate control may enhance insiders’ ability to expropriate perquisites; on the other hand, it may provide stability of management and reduce short‐term market pressures. Using a hand‐collected sample of U.S. dual‐class firms, we find that disproportionate control is positively associated with accounting‐based performance, but negatively associated with Tobin's Q. These results are consistent with the incentives of entrenched insiders who are interested in profitability but less beholden to capital markets.     

Sell-side analyst heterogeneity and insider trading

This study explores insider trading patterns under different earnings surprises. After controlling for stock market liquidity and earnings announcements returns, we show that insiders sell more aggressively depending on the heterogeneity of analysts whose EPS forecasts are met or beaten to camouflage their trades. Specifically, insiders sell more shares of their company sooner after the publication of earnings when top analysts' forecasts are met or beaten. Consistent with the informed trading literature, insiders strategically select these moments because the stock price impact is low and the legal scrutiny of their trades is minimal. To support this result, we employ an exogenous drop in firms' analyst coverage due to the closure or merger of brokerage houses. Furthermore, in line with the camouflage incentives, by selling after top analysts' forecasts are met or beaten, stock prices adjust slowly to insider trades. Finally, we show that the incentives of insiders to hide their trades are concentrated in opportunistic insiders and members of the top management team, who are more likely to bear the costs of selling shares after positive news.     

Uncertain times and the insider perspective

This paper examines insiders' informational privilege by studying the nexus between aggregated self-reported insider trades and Economic Policy Uncertainty (EPU). We demonstrate that firm insiders act in response to the first signs of uncertainty as it appears in the media, and high-ranked managers, such as CEOs and CFOs, react more promptly than other insiders. Our findings further support the idea that insiders' indirect informational advantages allow them to interpret the significance of public information for cash flows more accurately in their own companies. Our study is the first to examine insiders' behavior using pure public information; it is also the first to exclude the influence of private information completely. We also consider various measures of EPU, including global and categorical indices representing economic, political uncertainty, while taking the financial crisis period into account.     

Life insurance demand and borrowing constraints

The literature devoted limited attention to exploring the relationship between financial development and life insurance demand. Financial development supports life insurance supply by providing confidence in the financial system, more efficient payment systems, and higher availability of financial instruments. However, financial development reduces households' needs to save by relaxing borrowing constraints, indirectly affecting life insurance demand. We contribute by providing a demand‐driven explanation of the negative consequences of financial development on life insurance development. We find that more credit‐constrained countries have higher life insurance penetration on average. Indirectly, the role of borrowing constraints signifies the importance of life insurance policies as a financing tool in case of the realization of various background risks. This study integrates the knowledge from life insurance theory, life insurance lapse, policy loans demand, and saving under liquidity constraints literature and produces implications for researchers, policymakers, and life insurers.     

The market for borrowing corporate bonds

This paper describes the market for borrowing corporate bonds using a comprehensive data set from a major lender. The cost of borrowing corporate bonds is comparable to the cost of borrowing stock, between 10 and 20 basis points, and both have fallen over time. Factors that influence borrowing costs are loan size, percentage of inventory lent, rating, and borrower identity. There is no evidence that bond short sellers have private information. Bonds with Credit Default Swaps (CDS) contracts are more actively lent than those without. Finally, the 2007 Credit Crunch does not affect average borrowing costs or loan volume, but does increase borrowing cost variance.     

A dynamic theory of multiple borrowing

Multiple borrowing—when borrower obtains overlapping loans from multiple lenders—is a common phenomenon in many credit markets. We build a tractable, dynamic model of multiple borrowing and show that, because overlapping creditors can impose default externalities on each other, expanding financial access by introducing more lenders can backfire. Capital allocation is distorted away from the most productive uses. Entrepreneurs choose inefficient endeavors with low returns to scale. These problems are exacerbated when investments become more pledgeable or when borrowers have access to more lenders, explaining why increased access to finance does not always improve outcomes.