Arbeitspapier
Credit crunches from occasionally binding bank borrowing constraints
We present a model in which banks and other financial intermediaries face both occasionally binding borrowing constraints, and costs of equity issuance. Near the steady state, these intermediaries can raise equity finance at no cost through retained earnings. However, even moderately large shocks cause their borrowing constraints to bind, leading to contractions in credit offered to firms, and requiring the intermediaries to raise further funds by paying the cost to issue equity. This leads to the occasional sharp increases in interest spreads and the counter-cyclical, positively skewed equity issuance that are characteristic of the credit crunches observed in the data.
- ISBN
-
978-3-95729-543-9
- Sprache
-
Englisch
- Erschienen in
-
Series: Bundesbank Discussion Paper ; No. 57/2018
- Klassifikation
-
Wirtschaft
Investment; Capital; Intangible Capital; Capacity
Business Fluctuations; Cycles
Money Supply; Credit; Money Multipliers
- Thema
-
Occasionally binding constraints
Credit crunches
Financial crises
Spreads
Dividends
Equity
Banking
- Ereignis
-
Geistige Schöpfung
- (wer)
-
Holden, Tom D.
Levine, Paul
Swarbrick, Jonathan M.
- Ereignis
-
Veröffentlichung
- (wer)
-
Deutsche Bundesbank
- (wo)
-
Frankfurt a. M.
- (wann)
-
2018
- Handle
- Letzte Aktualisierung
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10.03.2025, 11:44 MEZ
Datenpartner
Dieses Objekt wird bereitgestellt von:
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. Bei Fragen zum Objekt wenden Sie sich bitte an den Datenpartner.
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. Bei Fragen zum Objekt wenden Sie sich bitte an den Datenpartner.
Objekttyp
- Arbeitspapier
Beteiligte
- Holden, Tom D.
- Levine, Paul
- Swarbrick, Jonathan M.
- Deutsche Bundesbank
Entstanden
- 2018
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