Sooyoung Song

Chung-Ang University · Chung-ang Business School

A neo classical model is proposed to highlight the firm's endogenous allocation decision over the liquid asset versus capital asset to the extent of firm size and liquidity shortage. Liquidity shock has a long lasting vestige on the firm's cash holding policy in the aftermath of Great recession. We conduct difference in difference regression to tes...

Among the default risks, systemic risk is of the biggest concern over the safety and effi- ciency of the payment and settlement system. When homogeneous financial institutions are linked with each other through the credit chain, a gridlock takes place as equilibrium in the payment and settlement system. A heterogeneous participant in the system cou...

This paper theoretically explores a role of the 'compensating balance' in the context of multiple-layered covenants associated with a bank loan contract. We show that the compensating balance, a portion of the loan proceeds put aside at a bank's checking account, might work as an effective deterrent to a borrowing firm from choosing a project with...