03740nam 2200709 450 991046361790332120180828010807.01-4623-5881-01-4527-4907-897866128419961-4518-7106-61-282-84199-8(CKB)3170000000055144(EBL)1608063(SSID)ssj0000943980(PQKBManifestationID)11612509(PQKBTitleCode)TC0000943980(PQKBWorkID)10982471(PQKB)10948551(OCoLC)874177680(MiAaPQ)EBC1608063(EXLCZ)99317000000005514420140227h20072007 uy 0engurcnu||||||||txtccrBanks' precautionary capital and persistent credit crunches /Fabian Valencia ; authorized for distribution by Antonio Furtado[Washington, District of Columbia] :International Monetary Fund,2007.©20071 online resource (37 p.)IMF Working PapersIMF working paper ;WP/08/248Description based upon print version of record.1-4519-1559-4 Includes bibliographical references.Contents; I. Introduction; II. Banks and the Real Economy; III. The Model; A. The Loan Contract; B. The Bank's Optimization Problem; C. Solution; D. Risk and the Target Level of Solvency; IV. Quantitative Experiments; V. Bank Recapitalization; VI. Conclusions; Figures; 1. Bank Credit as Percentage of GDP, Selected Countries; 2. Optimal Policy Functions; 3. Target Level of Solvency; 4. Responses to a Negative Transitory Productivity Shock; 5. Responses to an Interest Rate Increase; 6. Responses to a Large Negative Shock, With and Without Recapitalization7. Credit Crunch Severity and Bank Recapitalization Tables; 1. Bank's Sequence of Events; 2. Public Recapitalization Costs for Selected Crises Episodes; 3. Sensitivity Analysis to a 2-σ Productivity Shock; 4. Bank's Solvency Regions; Appendix; 8. Deposit Interest Rate; ReferencesPeriods of banking distress are often followed by sizable and long-lasting contractions in bank credit. They may be explained by a declined demand by financially impaired borrowers (the conventional financial accelerator) or by lower supply by capital-constrained banks, a ""credit crunch"". This paper develops a bank model to study credit crunches and their real effects. In this model, banks maintain a precautionary level of capital that serves as a smoothing mechanism to avert disruptions in the supply of credit when hit by small shocks. However, for larger shocks, highly persistent creditIMF Working PapersFinancial crisesUnited StatesEconometric modelsBank capitalUnited StatesEconometric modelsBank failuresUnited StatesEconometric modelsCreditUnited StatesEconometric modelsRiskUnited StatesEconometric modelsElectronic books.Financial crisesEconometric models.Bank capitalEconometric models.Bank failuresEconometric models.CreditEconometric models.RiskEconometric models.330.973Valencia Fabian910645Furtado Antonio928682MiAaPQMiAaPQMiAaPQBOOK9910463617903321Banks' precautionary capital and persistent credit crunches2250233UNINA