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Essays on the Microeconomics of Banking
Dvořák, Pavel ; Hanousek, Jan (advisor) ; Čihák, Martin (referee) ; Kraft, Evan (referee)
Essays on the Microeconomics of Banking - Dissertation Abstract The thesis consists of four chapters and is primarily a contribution to the literature on the microeconomics of banking. The first chapter focuses on alternative explanations of the apparent vast international differences in retail bank fees between countries on different levels of economic development. Apart from the usual form of asymmetric information between the bank and its borrowers (i.e. the assumption that the bank cannot observe the borrower's type), the additional assumption is that the borrowers themselves can have false perceptions about their quality. It is shown that the higher is the degree of the borrower's misperceptions about their skills the higher fees should be expected. In an alternative setup it is shown that comparable results can be received when banks possess imperfect testing technology (this assumption replaces the assumption about the borrower's false perceptions). Moreover, simulations using both setups also imply that under realistic conditions increasing wealth inequality in a country (measured by a Gini index) leads to higher fees. The second chapter focuses on the effects of inter-bank information sharing on the degree of competition in the banking industry. Information sharing is shown to be an effective...
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Essays on Finance and Banking
Vovchak, Tamara ; Hanousek, Jan (advisor) ; Hasan, Iftekhar (referee) ; Kraft, Evan (referee)
Tamara Vovchak Abstract This dissertation contributes to the literature on financial intermediation by examining the importance of banks as liquidity providers for corporate borrowers and the role of liquidity on banks' financial performance, as well as its role in the context of joint determination with bank capital and risk. It has been accepted in the banking literature that lending relationships are special and bank loans are the important source of external financing for corporate borrowers. Although tight lending relationships have benefits for borrowers it also can pose threads when relationship banks experience liquidity problems. First chapter provides evidence about the transmission of banking sector problems to corporate borrowers, and examines the impact of bank credit supply frictions on firm performance. I exploit differences in the composition of banks' liabilities structure during the financial crisis of 2007-2009 as a source of exogenous variation in the availability of bank credit to nonfinancial firms, in order to identify the causal relationship between bank credit supply and firm performance. My results indicate that banking relationships are important for firms. Firms whose banks relied more on core deposit financing had a lower decline in bank credit during the crisis than those whose...
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Essays on Finance and Banking
Vovchak, Tamara ; Hanousek, Jan (advisor) ; Hasan, Iftekhar (referee) ; Kraft, Evan (referee)
Tamara Vovchak Abstract This dissertation contributes to the literature on financial intermediation by examining the importance of banks as liquidity providers for corporate borrowers and the role of liquidity on banks' financial performance, as well as its role in the context of joint determination with bank capital and risk. It has been accepted in the banking literature that lending relationships are special and bank loans are the important source of external financing for corporate borrowers. Although tight lending relationships have benefits for borrowers it also can pose threads when relationship banks experience liquidity problems. First chapter provides evidence about the transmission of banking sector problems to corporate borrowers, and examines the impact of bank credit supply frictions on firm performance. I exploit differences in the composition of banks' liabilities structure during the financial crisis of 2007-2009 as a source of exogenous variation in the availability of bank credit to nonfinancial firms, in order to identify the causal relationship between bank credit supply and firm performance. My results indicate that banking relationships are important for firms. Firms whose banks relied more on core deposit financing had a lower decline in bank credit during the crisis than those whose...
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Essays on the International Transmission on Business Cycles
Lamazoshvili, Beka ; Kejak, Michal (advisor) ; Kraft, Evan (referee) ; Campolmi, Alessia (referee)
Beka Lamazoshvili - Dissertation Common Abstract Abstract This dissertation studies different aspects of the transmission of international business cycles across countries. It consists of three chapters. In the first chapter, we study the role of trade in consumer durable goods and capital goods in the context of a two-country New Keynesian (NK) dynamic stochastic general equilibrium (DSGE) model. Our benchmark model, calibrated for the U.S. and its trading partners, is able to account for the high volatility and positive correlation of exports and imports observed in the data and discussed in the literature (Engel and Wang, 2011; Erceg, Guerrieri and Gust, 2008). Moreover, it can also match the conventional interest rate channel that is a centerpiece of the NK framework. We compare our baseline model with alternative two-country NK models with and without consumer durable goods and capital goods. Our simulations show that our benchmark model performs better in the international dimension than the comparison models. In a version of the benchmark model with flexible prices, we found only a limited role of consumer durable goods. However, the presence of a nominal sector and price rigidities make consumer durable goods more important for the international dimension of the model. We also discuss plausible...
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Empirical Essays on Crises, Reforms and Growth
Stankov, Petar ; Lízal, Lubomír (advisor) ; Kraft, Evan (referee) ; Babecký, Jan (referee)
Introduction This work addresses three policy-relevant empirical issues. First, how do banking crises affect financial reforms? It turns out that banking crises pro- duce a variety of reform patterns in the financial sector over time. Second, do countries which reform their financial, product, and labor markets grow similarly? The results suggest that some countries benefit more from market- oriented reforms than others. Third, if some countries benefit more, could it be because various economies have markedly different firm-size distributions, and firms of different size grow differently after identical reforms? If firms of different size indeed grow differently after identical reforms, this could produce diverse growth outcomes across countries after similar reforms. The first study has been motivated by the fact that a number of coun- tries have gone through banking crises since the early 1970s. It links those episodes with the patterns of various financial reforms within those countries. As banking crises are endogenous, crisis exposures to major trading partners help identify the causality between crises and reforms. Consistent with the previous literature, the results of this work demonstrate that systemic bank- ing crises reverse most financial reforms. However, they do so with various lags, whereas the impact of...
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Essays on the Microeconomics of Banking
Dvořák, Pavel ; Hanousek, Jan (advisor) ; Čihák, Martin (referee) ; Kraft, Evan (referee)
Essays on the Microeconomics of Banking - Dissertation Abstract The thesis consists of four chapters and is primarily a contribution to the literature on the microeconomics of banking. The first chapter focuses on alternative explanations of the apparent vast international differences in retail bank fees between countries on different levels of economic development. Apart from the usual form of asymmetric information between the bank and its borrowers (i.e. the assumption that the bank cannot observe the borrower's type), the additional assumption is that the borrowers themselves can have false perceptions about their quality. It is shown that the higher is the degree of the borrower's misperceptions about their skills the higher fees should be expected. In an alternative setup it is shown that comparable results can be received when banks possess imperfect testing technology (this assumption replaces the assumption about the borrower's false perceptions). Moreover, simulations using both setups also imply that under realistic conditions increasing wealth inequality in a country (measured by a Gini index) leads to higher fees. The second chapter focuses on the effects of inter-bank information sharing on the degree of competition in the banking industry. Information sharing is shown to be an effective...
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