G3 - Corporate Finance and Governance

• Timing of Banks’ Loan Loss Provisioning During the Crisis

  Staff Working Paper 2016-27 Leo de Haan, Maarten van Oordt

  We estimate a panel error correction model for loan loss provisions, using unique supervisory data on flow of funds into and out of the allowance for loan losses of 25 Dutch banks in the post-2008 crisis period. We find that these banks aim for an allowance of 49% of impaired loans.

  Content Type(s): Staff Research, Staff Working Papers Topic(s): Financial Institutions, Financial stability JEL Code(s): G, G0, G01, G2, G21, G3, G32

• A Framework in Search of an Optimal Margining Policy for Official Institutions: The Canadian Experience

  Staff Discussion Paper 2016-9 Tomo Nakashima, Mihai Cosma, Boran Plong

  One of the main outcomes of the global financial crisis has been a series of new regulations imposed on the financial system and specifically on banks.

  Content Type(s): Staff Research, Staff Discussion Papers Topic(s): Financial markets, Foreign reserves management JEL Code(s): G, G3, G32

• What Is Behind the Weakness in Global Investment?

  Staff Discussion Paper 2016-5 Maxime Leboeuf, Robert Fay

  The recovery in private business investment globally remains extremely weak more than seven years after the financial crisis. This paper contributes to the ongoing policy debate on the factors behind this weakness by analyzing the role of growth prospects and uncertainty in explaining developments in non-residential private business investment in large advanced economies since the crisis.

  Content Type(s): Staff Research, Staff Discussion Papers Topic(s): Business fluctuations and cycles, Central bank research, Domestic demand and components, Economic models, International topics, Recent economic and financial developments, Uncertainty and monetary policy JEL Code(s): C, C2, C23, C3, C33, D, D2, D24, D8, D80, D84, E, E2, E22, F, F0, F01, G, G3, G31

• Shock Transmission Through International Banks: Canada

  Technical Report No. 105 James Chapman, H. Evren Damar

  In this paper, we investigate how liquidity conditions in Canada may affect domestic and/or foreign lending of globally active banks and whether this transmission is influenced by individual bank characteristics.

  Content Type(s): Technical Reports Topic(s): Financial Institutions, Financial stability JEL Code(s): E, E4, E44, F, F3, F36, G, G2, G21, G3, G32

• Managerial Compensation Duration and Stock Price Manipulation

  Staff Working Paper 2015-25 Josef Schroth

  I build a model of optimal managerial compensation where managers each have a privately observed propensity to manipulate short-term stock prices.

  Content Type(s): Staff Research, Staff Working Papers Topic(s): Economic models, Labour markets, Recent economic and financial developments JEL Code(s): D, D8, D82, G, G1, G14, G3, G30, M, M1, M12

• Persistent Leverage in Portfolio Sorts: An Artifact of Measurement Error?

  Staff Working Paper 2014-55 Michael Mueller

  Studies such as Lemmon, Roberts and Zender (2008) demonstrate how stable firms’ capital structures are over time, and raise the question of whether new theories of capital structure are needed to explain these phenomena.

  Content Type(s): Staff Research, Staff Working Papers Topic(s): Econometric and statistical methods, Financial markets JEL Code(s): C, C1, C18, G, G3, G32

• 13 November 2014 The Use of Financial Derivatives by Canadian Firms

  Bank of Canada Review - Autumn 2014 Teodora Paligorova, Rhonda Staskow

  In Canada, about one-third of publicly listed non-financial firms use financial derivatives. The use of derivatives is widespread across all sectors of the economy and increases during periods of greater uncertainty. Non-financial firms that use derivatives are typically larger and more profitable and have lower volatility of earnings than those that do not use derivatives. Overall, the firm characteristics of Canadian hedgers seem to be consistent with those found in other jurisdictions.

  Content Type(s): Publications, Bank of Canada Review Article Topic(s): Exchange rates, Financial markets JEL Code(s): G, G1, G10, G3, G32

• Removal of the Unwinding Provisions in the Automated Clearing Settlement System: A Risk Assessment

  Staff Discussion Paper 2014-4 Nicholas Labelle, Varya Taylor

  A default in the Automated Clearing Settlement System (ACSS) occurs when a Direct Clearer is unable to settle its final obligation.

  Content Type(s): Staff Research, Staff Discussion Papers Topic(s): Financial stability, Payment clearing and settlement systems JEL Code(s): C, C1, C15, G, G0, G01, G2, G3

• Corporate Governance, Product Market Competition and Debt Financing

  Staff Working Paper 2014-5 Teodora Paligorova, Jun Yang

  This paper examines the impact of product market competition and corporate governance on the cost of debt financing and the use of bond covenants. We find that more anti-takeover provisions are associated with a lower cost of debt only in competitive industries.

  Content Type(s): Staff Research, Staff Working Papers Topic(s): Financial markets JEL Code(s): G, G1, G12, G3, G34

• Funding Advantage and Market Discipline in the Canadian Banking Sector

  Staff Working Paper 2013-50 Mehdi Beyhaghi, Chris D'Souza, Gordon S. Roberts

  We employ a comprehensive data set and a variety of methods to provide evidence on the magnitude of large banks’ funding advantage in Canada, and on the extent to which market discipline exists across different securities issued by the Canadian banks.

  Content Type(s): Staff Research, Staff Working Papers Topic(s): Financial Institutions, Interest rates JEL Code(s): G, G0, G01, G2, G21, G28, G3, G32, G33