International Finance

Permanent URI for this collectionhttps://hdl.handle.net/10679/314

Browse

Browsing by Subject "Bank bailouts"

Filter results by typing the first few letters
Now showing 1 - 2 of 2
  • Thumbnail Image
    ArticlePublicationOpen Access
    Political connections and informed trading: Evidence from TARP
    (Wiley, 2021-09) Akın, Özlem; Coleman, N. S.; Fons‐Rosen, C.; Peydró, J.-L.; International Finance; PARLAYAN, Özlem Akın
    We study insider trading behavior surrounding the largest bank bailout in history: Troubled Asset Relief Program (TARP). In politically connected banks, insider buying during the pre-TARP period is associated with increases in abnormal returns around bank-specific TARP announcement; for unconnected banks, trading and returns are uncorrelated. Results hold across insiders within the same bank and are stronger for finance-related government connections. Through a Freedom of Information Act request, we obtained the previously undisclosed TARP funds requested; the ratio of received to requested funds correlates both with abnormal returns and insider buying behavior in connected banks.
  • Thumbnail Image
    ArticlePublicationOpen Access
    Should cross-border banking benefit from the financial safety net?
    (Elsevier, 2016) Bertay, Ata Can; Demirgüç-Kunt, A.; Huizinga, H.; International Finance; BERTAY, Ata Can
    Using bank-level data from 84 countries, we find that a higher degree of bank internationalization is associated with higher interest expenses. Internationalization is proxied by a bank's share of foreign liabilities in total liabilities or a Herfindahl index of international liability concentration. Bank interest expenses rise relatively more with internationalization if the bank is underperforming or headquartered in a country with weak public finances, and especially at times of weak world output growth. These results suggest that liability holders of distressed internationalized banks expect less from the financial safety net since lack of an efficient recovery and resolution regime for international banks can make their insolvency very costly to deal with.