Credit crunches from occasionally binding bank borrowing constraints

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Bibliographic Details
Authors and Corporations:	Holden, Tom D. (Author), Levine, Paul (Author), Swarbrick, Jonathan M. (Author)
Other Authors:	Levine, Paul 1944- [Author] • Swarbrick, Jonathan M. [Author]
Type of Resource:	E-Book
Language:	English
published:	[Ottawa] Bank of Canada December 2017
Series:	Bank of Canada: Staff working paper ; 2017, 57
Subjects:	Business fluctuations and cycles Credit and credit aggregates Economicmodels Financial markets Graue Literatur
Source:	Verbunddaten SWB Lizenzfreie Online-Ressourcen
Notes:	Zusammenfassung in französischer Sprache

Description
Summary:	We present a model in which banks and other financial intermediaries face both occasionally binding borrowing constraints and costs of equity issuance. Near the steady state, these intermediaries can raise equity finance at no cost through retained earnings. However, even moderately large shocks cause their borrowing constraints to bind, leading to contractions in credit offered to firms, and requiring the intermediaries to raise further funds by paying the cost to issue equity. This leads to the occasional sharp increases in interest spreads and the countercyclical, positively skewed equity issuance that are characteristic of the credit crunches observed in the data.
Physical Description:	1 Online-Ressource (circa 42 Seiten); Illustrationen
Notes:	Zusammenfassung in französischer Sprache