Tag Archives: COVID-19

How Do Non-Performing Loans Evolve along the Economic Cycle? The Role of Macroeconomic Conditions and Legal Efficiency

By | January 19, 2022

The reports about increased insolvency risk during the recent COVID-19 pandemic highlight the importance of banks’ balance sheet resilience. In times of crisis, regulators are most concerned about the build-up of non-performing loans (NPLs) – many historical examples show that excessive levels of NPLs can seriously endanger financial stability (e.g., in Japan, Italy, Mexico, or Asia). Evidence from the… Read More »

When Companies Don’t Die: Analyzing Zombie and Distressed Firms in a Low Interest Rate Environment

By | September 7, 2021

Last September, The Economist published an article titled “Why Covid-19 will make killing off zombie firms harder.” The article fueled an already widely debated topic and expresses general concerns that schemes put in place to help pandemic-stricken businesses to survive might exacerbate therise of the corporate undead. The ongoing crisis highlights the necessity of analyzing the ”zombification” phenomenon; a constellation in which public support schemes and bank lending activities could keep non-viable firms afloat for longer. There are several examples… Read More »

The Pandemic Crisis Shows that the World Remains Trapped in a “Global Doom Loop” of Financial Instability, Rising Debt Levels, and Escalating Bailouts

By | August 19, 2021

In January 2020, I completed a book analyzing the financial crises that triggered the Great Depression of the 1930s and the recent Great Recession.  In that book, I argued that the world’s financial system was caught in a “global doom loop” at the beginning of 2020.  Bailouts and economic stimulus programs during and after the global financial crisis of… Read More »

Dinero Electrónico: Deployment Notes of the First CBDC

By | August 4, 2021

Convenience, speed, and cost are important considerations for electronic payments. Recent events surrounding the COVID-19 pandemic may accelerate these trends as peoples’ willingness to handle cash may be waning. As policy makers try to assess the benefits and risks of Central Bank Digital Currencies (CBDC) researchers at central banks and academic institutions have contributed to the discussion with theoretical works… Read More »

AI in the Boardroom: A Revolutionary Construct?

By | August 2, 2021

The importance of good corporate governance has received a renewed vigor over the last decade, culminating recently with the impact of the COVID-19 pandemic. Companies now, more than ever before, need to be more resilient and sustainable. Our recent paper explores the shortcomings of corporate governance and how AI may provide tools to address some of these… Read More »

SPAC of Everything: Challenging Financial Regulation in Times of Crisis

By | July 27, 2021

By the end of 2020, more than 240 special-purpose acquisition companies (SPACs) listed in the U.S. (on NASDAQ or the NYSE), raising a record $83 billion, according to SPAC Research. SPACs have already surged past last year’s record in the first quarter of 2021, raising $98.1 billion. These numbers are eye-catching. In 2007, the average… Read More »

Hedge Fund Trading and Funding During the March 2020 US Treasury Market Dislocation

By | July 13, 2021

The role of hedge funds in U.S. Treasury (UST) markets is thought to have increased in importance since the global financial crisis (GFC) as bank-affiliated broker-dealers ceded some of their traditional activities in UST market arbitrage and liquidity provision to non-bank financial institutions. While UST securities play a vital role in the global financial system,… Read More »

Mutual Fund Liquidity Management, Stock Liquidity, and Corporate Disclosure

By | June 24, 2021

“Lessons from COVID-19: Liquidity Risk Management is Central to Open-Ended Funds.” —BlackRock (2020) “Liquidity risk management programs (LRMPs) will be a focus area for the Division.” —SEC (2021) Mutual fund liquidity management has become increasingly important since the financial crisis of 2007–2009, during which regulators and practitioners raised concerns about whether mutual fund portfolios had… Read More »

Cruel and Unusual Circumstances: The Fed’s Use and Misuse of Penalty Rates

By | June 21, 2021

After a political and legislative showdown at the end of 2020, Congress closed the Fed’s most novel Section 13(3) emergency lending facilities—the ones aimed most directly at Main Street. These facilities—supported by Treasury funds allocated by the Coronavirus Aid, Relief, and Economic Security (CARES) Act—lent only a fraction of their stated maximum lending limits, leaving many criticizing the programs’ overly punitive… Read More »

Duke Eviction Prevention Working Group Follow-up Letter to North Carolina Leaders

By | May 12, 2021

The following is a copy of a letter was recently sent to North Carolina Governor, Roy Cooper; North Carolina Senate President Pro Tempore, Phil Berger; and North Carolina House Speaker, Tim Moore. This letter is written to you on behalf of the Eviction Prevention Working Group.  The Working Group was formed under the sponsorship of the… Read More »

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