Search

Showing total 2 results
Start Over Topic financial statements Region europe Publisher board of governors of the federal reserve system
2 results

1. Global European Banks and the Financial Crisis.

Author

Noeth, Bryan and Sengupta, Rajdeep

Subjects
BANKING industry, CAPITAL movements, FINANCIAL crises, PRICE increases, FINANCIAL statements
Abstract

This paper reviews some of the recent studies on international capital flows with a focus on the role of European global banks. It presents a revision to the commonly held "global saving glut" view that East Asian economies (along with oil-rich nations) were the dominant suppliers of capital that fueled the asset price boom in many parts of the world in the early 2000s. It argues that the role of funding costs and a "liberal" regulatory regime that allowed for an unprecedented expansion of the balance sheets of European banks was no less important. Finally, we describe the aftermath of the crisis in terms of some of the challenges faced by Europe as a whole and European banks in particular. [ABSTRACT FROM AUTHOR]

Published
2012
Full Text
View/download PDF

2. Capital Allocation and Productivity in South Europe.

Author

Gopinath, Gita, Kalemli-Özcan, Şebnem, Karabarbounis, Loukas, and Villegas-Sanchez, Carolina

Subjects
CAPITAL movements, PRODUCTION (Economic theory), MANUFACTURING industries, ECONOMIC development, FINANCIAL statements
Abstract

Following the introduction of the euro in 1999, countries in the South experienced large capital inflows and low productivity. We use data for manufacturing firms in Spain to document a significant increase in the dispersion of the return to capital across firms, a stable dispersion of the return to labor across firms, and a significant increase in productivity losses from misallocation over time. We develop a model of heterogeneous firms facing financial frictions and investment adjustment costs. The model generates cross-sectional and time-series patterns in size, productivity, capital returns, investment, and debt consistent with those observed in production and balance sheet data. We illustrate how the decline in the real interest rate, often attributed to the euro convergence process, leads to a decline in sectoral total factor productivity as capital inflows are misallocated toward firms that have higher net worth but are not necessarily more productive. We conclude by showing that similar trends in dispersion and productivity losses are observed in Italy and Portugal but not in Germany, France, and Norway. [ABSTRACT FROM AUTHOR]

Published
2015