Recent Developments in Finance and Banking after the 2008 Crisis

A special issue of International Journal of Financial Studies (ISSN 2227-7072).

Deadline for manuscript submissions: closed (30 June 2014) | Viewed by 39460

Special Issue Editors

Dean and Professor of Economics, J. Whitney Bunting College of Business, Georgia College & State University, Milledgeville, GA 31061, USA
Interests: applied time series econometrics; financial economics; energy economics

Special Issue Information

Dear Colleagues,

One of the key lessons of the recent crisis is the close interdependence between the detailed features of financial systems and macroeconomic outcomes. Thus, the tight separation of financial and macroeconomic issues needs to be overcome. Initiatives to better analyze “macrofinancial” linkages and to conduct “macroprudential” policy have mushroomed since the start of the crisis, although they generally fall short of a fully joined-up framework. From this perspective, the focus of this volume will be:

First, on the financial regulation understood as a cluster of interrelated policies designed to ensure the proper functioning and integrity of financial systems. This scope includes public regulation and supervision of bank capital, leverage, liquidity, and risk management; control of moral hazard and financial industry incentives; protection of the customers of financial services; and the regulation of capital markets. Other reform areas such as capital-flow controls, prevention of money laundering, and the taxation of financial activities can complement this agenda,

and

Second, Banks had mismanaged their liquidity positions and failed to secure stable and diversified sources of income and to contain costs, while opaque balance sheets significantly impaired analyses of risk, thus preventing a timely awareness of the weakness of banks’ capital buffers. The lessons learned from the crisis have influenced markets’ and analysts’ perception of banks and have led to new regulatory initiatives that will shape banks’ post-crisis business models. The financial crisis has shown that banks need to better understand interactions between risk, return, capital and liquidity. Banks should therefore focus on developing a holistic approach. This means not only involving all business units and areas, but also taking into account certain external factors, such as macroeconomic scenarios.

Prof. Dr. Nicholas Apergis
Prof. Dr. James Earl Payne
Guest Editor

Manuscript Submission Information

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Please visit the Instructions for Authors page before submitting a manuscript. The Article Processing Charge (APC) for publication in this open access journal is 1800 CHF (Swiss Francs). Submitted papers should be well formatted and use good English. Authors may use MDPI's English editing service prior to publication or during author revisions.

Keywords

  • 2008 crisis
  • financial and capital industry
  • banking institutions
  • regulation
  • capital flows
  • liquidity
  • leverage
  • risk management
  • moral hazard

Published Papers (6 papers)

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Editorial

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136 KiB  
Editorial
Special Issue: Recent Developments in Finance and Banking after the 2008 Crisis
by Nicholas Apergis and James Earl Payne
Int. J. Financial Stud. 2015, 3(2), 151-152; https://doi.org/10.3390/ijfs3020151 - 13 May 2015
Cited by 26 | Viewed by 3970
Abstract
The sub-prime financial crisis was not simply the result of excessive leverage and inadequate capital, but it was brewing for some time as a result of a gradual deterioration of business leadership, lapses in governance and in the regulatory framework (particularly in derivatives [...] Read more.
The sub-prime financial crisis was not simply the result of excessive leverage and inadequate capital, but it was brewing for some time as a result of a gradual deterioration of business leadership, lapses in governance and in the regulatory framework (particularly in derivatives markets), and an ineffective risk-management framework.[...] Full article
(This article belongs to the Special Issue Recent Developments in Finance and Banking after the 2008 Crisis)

Research

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440 KiB  
Article
On Transaction-Cost Models in Continuous-Time Markets
by Thomas Poufinas
Int. J. Financial Stud. 2015, 3(2), 102-135; https://doi.org/10.3390/ijfs3020102 - 24 Apr 2015
Cited by 22 | Viewed by 4612
Abstract
Transaction-cost models in continuous-time markets are considered. Given that investors decide to buy or sell at certain time instants, we study the existence of trading strategies that reach a certain final wealth level in continuous-time markets, under the assumption that transaction costs, built [...] Read more.
Transaction-cost models in continuous-time markets are considered. Given that investors decide to buy or sell at certain time instants, we study the existence of trading strategies that reach a certain final wealth level in continuous-time markets, under the assumption that transaction costs, built in certain recommended ways, have to be paid. Markets prove to behave in manners that resemble those of complete ones for a wide variety of transaction-cost types. The results are important, but not exclusively, for the pricing of options with transaction costs. Full article
(This article belongs to the Special Issue Recent Developments in Finance and Banking after the 2008 Crisis)
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275 KiB  
Article
Sovereign Credit Risk and Stock Markets–Does the Markets’ Dependency Increase with Financial Distress?
by Paulo Pereira Da Silva
Int. J. Financial Stud. 2014, 2(1), 145-167; https://doi.org/10.3390/ijfs2010145 - 17 Mar 2014
Cited by 11 | Viewed by 5963
Abstract
This paper addresses the relationship between stock markets and credit default swaps (CDS) markets. In particular, I aim to gauge if the co-movement between stock prices and sovereign CDS spreads increases with the deterioration of the credit quality of sovereign debt. The analysis [...] Read more.
This paper addresses the relationship between stock markets and credit default swaps (CDS) markets. In particular, I aim to gauge if the co-movement between stock prices and sovereign CDS spreads increases with the deterioration of the credit quality of sovereign debt. The analysis of correlations, Granger causality, cointegration, and the results of an error-correction model represented in a state space form show a close link between these markets, but do not evidence that the co-movement increases in periods of financial distress. I also analyze the transmission of volatility between the two markets. The results do not support the hypothesis that volatility propagation surges during financial distress periods. On the contrary, for some cases, the data suggests that the lead-lag relationships between the two markets volatility are stronger during stable periods. Full article
(This article belongs to the Special Issue Recent Developments in Finance and Banking after the 2008 Crisis)
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136 KiB  
Article
New Evidence on the Information and Predictive Content of the Baltic Dry Index
by Nicholas Apergis and James E. Payne
Int. J. Financial Stud. 2013, 1(3), 62-80; https://doi.org/10.3390/ijfs1030062 - 24 Jul 2013
Cited by 53 | Viewed by 9048
Abstract
This empirical study analyzes the information and predictive content of the Baltic Dry Index (BDI) with respect to a range of financial assets and the macroeconomy. By using panel methodological approaches and daily data spanning the period 1985–2012, the empirical analysis documents the [...] Read more.
This empirical study analyzes the information and predictive content of the Baltic Dry Index (BDI) with respect to a range of financial assets and the macroeconomy. By using panel methodological approaches and daily data spanning the period 1985–2012, the empirical analysis documents the joint predictability capacity of the BDI for both financial assets and industrial production. The results reveal the role of the BDI in predicting the future course of the real economy, yielding a link between financial asset markets and the macroeconomy. Full article
(This article belongs to the Special Issue Recent Developments in Finance and Banking after the 2008 Crisis)
164 KiB  
Article
Quantity versus Price Rationing of Credit: An Empirical Test
by George A. Waters
Int. J. Financial Stud. 2013, 1(3), 45-53; https://doi.org/10.3390/ijfs1030045 - 01 Jul 2013
Cited by 43 | Viewed by 5703
Abstract
One proxy of price rationing of credit is an aggregation of information on interest rates, while loan officer survey data measures quantity rationing of credit, meaning some borrowers are denied loans. The latter Granger causes real GDP but the former does not. The [...] Read more.
One proxy of price rationing of credit is an aggregation of information on interest rates, while loan officer survey data measures quantity rationing of credit, meaning some borrowers are denied loans. The latter Granger causes real GDP but the former does not. The loan officer survey is a better leading indicator of credit market conditions that affect real activity. Full article
(This article belongs to the Special Issue Recent Developments in Finance and Banking after the 2008 Crisis)
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482 KiB  
Article
Decomposing US Money Supply Changes since the Financial Crisis
by Richard Robinson and Marwan El Nasser
Int. J. Financial Stud. 2013, 1(2), 32-44; https://doi.org/10.3390/ijfs1020032 - 21 Jun 2013
Cited by 24 | Viewed by 9356
Abstract
In response to the financial crisis of 2008, the Federal Reserve radically increased the monetary base. Banks responded by increasing excess reserves rather than increasing bank loans, and the public responded with a substantial flight to liquidity in the form of currency and [...] Read more.
In response to the financial crisis of 2008, the Federal Reserve radically increased the monetary base. Banks responded by increasing excess reserves rather than increasing bank loans, and the public responded with a substantial flight to liquidity in the form of currency and demand deposits. As a result, the money-supply multipliers substantially decreased, so that the actual money supply measures grew more moderately than the base. The sustained multiplier-collapse spawned reexamination of monetary versus fiscal theories of price-level determination. This paper, however, presents decompositions of the money-multiplier collapse into changes in the currency-to-deposit ratios, and changes in the reserve-to-deposit ratio. By doing so, possible near-term increases in the multipliers are simulated so that the possibility of either full or partial restoration to their pre-crisis levels is assessed. Policy possibilities for controlling the money supply over various horizons follow. This analysis illustrates the Federal Reserve’s exit dilemma that results from its financial-crisis policy. Full article
(This article belongs to the Special Issue Recent Developments in Finance and Banking after the 2008 Crisis)
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