Razvan Vlahu’s research while affiliated with De Nederlandsche Bank and other places

... Banks are incentivized by market forces to maintain a positive level of capital. This not only helps banks attract funds and maintain long-term customer relationships but also enables them to carry out essential lending risks (Allen et al., 2011;Holmstrom & Tirole, 1997;Perotti et al., 2011). However, relying solely on market forces is not enough to ensure that the equilibrium bank capital levels are optimal for the welfare of society. ...

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Un/desired impact of capital buffers: Evidence from Indonesian bank profitability and risk-taking

... Excessive risk-taking by key banking institutions is widely believed to be one of the primary causes of past systemic crises-including the GFC (Battaglia and Gallo 2015;Erkens et al. 2012). However, prior studies do not seem to support the assertion that the banking system deemed the level of risks before the crises to be excessive (Ozili 2018;Fernández et al. 2016;Ratnovski et al. 2015;Klomp and de Haan 2014). For instance, Ozili (2018) argued that risk-taking is important in ensuring a stable banking system. ...

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Risk-taking and systemic banking crisis in Africa: do regulatory policy framework provide new insight in threshold models?

... When society discovers that the intrinsic value of the available money is tending to be zero, the feeling of euphoria easily turns into a feeling of panic with irrational decisions such as a bank-run (Brown et al., 2014;Pauly, 1968). 7 In that case, individuals want to withdraw their money from the banks and stop any form of unnecessary consumption. ...

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Stars and precariousness in the art world. An alternative

... The scope of the legal reform in Romania was restricted by a decision of the Constitutional Court adopted only a few months after the law entered into force. This reduced the incentives for strategic default(Andries et al, 2021).10 In most legal systems, if a debtor is found to not be acting in good faith, sanctions may apply which could include fines and penalties in addition to exclusion from discharge.©International ...

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The Right Tool for the Job? Mortgage Distress and Personal Insolvency during the European Debt Crisis

... It includes the uncertainty linked with borrowers' ability to service loans, the construction of non-performing loans, and the, It also includes the relationship between bank profitability, borrowing constraints, and the influence of monetary policy on risk-taking behaviour (Kun and Duo, 2014;Shamshur and Weill, 2023;Zakaria, 2017;Zhang et al., 2024). Higher bank profitability can lead to increased risk-taking due to loosened borrowing constraints, especially when leverage constraints are looser or new investments can be financed with senior funding (Martynova et al., 2020). Nuanced findings and theoretical implications of earlier studies using Stakeholder Theory to investigate the non-linear interaction between EQ and bank risk-taking have deepened our understanding of environmental factors affecting financial decision-making in banking institutions (Gao and Wang, 2024). ...

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Nonlinear Relationship between Environmental Quality and Bank Risk-Taking in the MENA Region

... According to Konig-Kersting, Trautmann, and Vlahu (2022), the effects of increased precision in disclosed information are contingent on the fundamentals of the financial institutions. In particular, banks with solid fundamentals and the ability to withstand liquidity shocks face a lower default risk when they disclose more precise financial data. ...

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Do risk disclosures enhance the efficacy of regulatory and supervisory frameworks in restricting banks’ risk-taking?

... W przypadku znacznych spadków cen nieruchomości kredyty oparte na stałej stopie procentowej odznaczają się lepszymi parametrami ryzyka kredytowego, na co wskazują Shi i Riley [2014]. W krajach, w których dominują kredyty o zmiennym oprocentowaniu, jakość portfela kredytów hipotecznych jest stosunkowo gorsza [Stanga i in., 2017]. ...

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Kredyty hipoteczne o stałej oraz okresowo stałej stopie procentowej – ocena dotychczasowej polityki regulacyjnej oraz rekomendacje dla niej

... However, they find opposite results regarding the case in which the fundamentals of the banks are independent. While Chakravarty et al. (2014) find that bank runs are contagious in that case, Brown et al. (2016) find no evidence of contagion (see König-Kersting et al. (2017) for related evidence). Interestingly, Brown et al. (2016) elicit depositors' beliefs and find that upon observing a bank run from an unconnected bank, they tend to believe that more other patient depositors will run. ...

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Experimental Bank Runs

... Many empirical investigations focusing on non-financial organizations, including those conducted by Titman and Wessels (1988) As an illustration, he noted that the magnitude of a bank exhibits a positive correlation with both the total debt ratio and the short-term debt ratio, but a negative correlation with the long-term debt ratio. Gropp and Heider (2010) found a positive correlation between the scale of a bank and both book leverage and market leverage (Martynova et al., 2020). It was observed by Tchuigoua (2014) that external debt is substantially and positively correlated with size. ...

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Healthcare Industries' Capital Structure Determinants: Evident Listed Companies on the Indonesian Stock Exchang

... countries have similar levels of financial development. 17 The first instrument considers the level of financial development of the closest country, measured by its geographical distance, following a method similar to that of Stanga et al. (2020). As many island states in our dataset do not have direct neighbours, we apply a distance-based approach. ...

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Does Financial Development Reduce the Poverty Gap?