| 1. |
- Baros, Aleksandra, et al.
(författare)
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Bank liquidity and capital shocks in unconventional times
- 2023
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Ingår i: European Journal of Finance. - : Taylor & Francis Group. - 1351-847X .- 1466-4364. ; 29:14, s. 1678-1703
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Tidskriftsartikel (refereegranskat)abstract
- This paper examines bank liquidity management following capital shocks under capital and liquidity regulation in a period of unconventional monetary policies. Studying European banks between 2010 and 2018, we find that bank liquidity is generally not affected by a negative capital shock. Capital shocks are nevertheless transmitted into liquidity positions through balance sheet adjustments. Addressing bank-level balance sheet policies, we find that the banks de-risk assets by replacing corporate loans with financial securities, especially if the shock takes place during periods of heightened central bank interventions. Moreover, asset-side-dominant risk-reducing behavior goes against regulatory intent and indicates that regulatory arbitrage considerations affect banks’ responses to shocks. Finally, we document heterogeneous responses by banks depending on their size, type, and country. These findings imply that compliance with regulation may lead to partial shortages in corporate lending, with banks prioritizing investment in government securities in event of a capital shock.
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| 2. |
- Croci, Ettore, et al.
(författare)
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CEO age, risk incentives, and hedging instrument choice
- 2014
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Annan publikation (övrigt vetenskapligt/konstnärligt)abstract
- We analyze how firms hedge in the oil and gas industry. Our main finding is that CEO age determines hedging behavior. The probability of being a hedger as well as the use of linear hedging strategies decreases with CEO age. These results are consistent with an argument that financial distress, which sends a negative signal of managerial ability, is relatively more costly to younger CEOs. We also investigate the vega-theory of hedging instrument choice, finding some support for a negative relationship between vega and a) the use of derivatives and b) hedging strategies that include the sale of call options.
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| 3. |
- Croci, Ettore, et al.
(författare)
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CEO Age, Risk Incentives, and Hedging Strategy
- 2017
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Ingår i: Financial Management. - : Wiley. - 0046-3892. ; , s. 687-716
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Tidskriftsartikel (refereegranskat)abstract
- We test if managerial preferences explain how firms hedge using hand-collected data on derivative portfolios in the oil and gas industry. How firms hedge involves choosing between linear contracts and put options, and deciding whether to finance these hedging positions with cash-on-hand or by selling call options. The likelihood of being a hedger increases with CEO age, and near-retirement CEOs prefer linear hedging instruments. The predictions of the managerial risk incentives-theory of hedging strategy, according to which managers with convex compensation schemes would avoid hedging strategies that cap upside potential, find no support in the data.
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