Credit derivatives and bank credit supply

Abstract

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What drives bank securitisation? The Spanish experience

“…The securitisation of liabilities could be considered an inappropriate form of securitisation, although its structure is of the traditional type and it functions in a very similar way to the securitisation of assets. The only notable feature is that 4 One portion of the existing literature offers analyses of aspects such as the effect of securitisation on the risks incurred by the banks making use of this technique (Dionne and Harchaoui, 2008;Hänsel and Krahnen, 2007;Vermilyea et al, 2008), the quoted prices of the shares of the entities issuing securitisation programs (Lockwood et al, 1996;Thomas, 1999Thomas, , 2001) and the supply of bank loans (Hirtle, 2007;Loutskina and Strahan, 2009), among others. 5 In Jones (2000), there is an analysis of the principal techniques used to perform capital arbitrage under this Accord (Basel I).…”

Credit Default Swaps and the Empty Creditor Problem

“…For example, Hirtle (2008) shows that greater use of CDS leads to an increase in bank credit supply and an improvement in credit terms, such as maturity and required spreads, for large loans that are likely to be issued by companies that are 'named credits'in the CDS market.…”

“…For example, Hirtle (2008) shows that greater use of CDS leads to an increase in bank credit supply and an improvement in credit terms, such as maturity and required spreads, for large loans that are likely to be issued by companies that are 'named credits'in the CDS market. Ashcraft and Santos (2007) show that the introduction of CDS has lead to an improvement in borrowing terms for safe and transparent …rms, where banks'monitoring incentives are not likely to play a major role.…”

Credit Risk Hedging, Deposit Insurance Fund Protection, and Default Risk in Retail Banking during a Financial Crisis

“…See Bedendo and Bruno (2012) for the joint usage of the three credit risk transfer tools. Hirtle (2009) indicates that those tools are normally seen by banks as complements rather than as substitutes. Note 3.…”