Delegated Monitoring and Contracting

2018 ◽  
Author(s):  
Sebastian Gryglewicz ◽  
Simon Mayer
Keyword(s):  
Delegated Monitoring

Bond Covenants and Delegated Monitoring

1988 ◽  
Vol 43 (2) ◽  
pp. 397-412 ◽  
Author(s):  
MITCHELL BERLIN ◽  
JAN LOEYS
Keyword(s):  
Delegated Monitoring

scholarly journals Delegated monitoring versus arm's-length contracting

2004 ◽  
Vol 22 (7) ◽  
pp. 951-981 ◽  
Author(s):  
Vianney Dequiedt ◽  
David Martimort
Keyword(s):  
Delegated Monitoring

scholarly journals Banks Intermediation and Stock Prices of Deposit Money Banks in Nigeria: VECM and Variance Decomposition Approach

2020 ◽  
Vol 8 (1) ◽  
pp. 102-112
Author(s):  
Subair K ◽  
◽  
Soyebo Yusuf A ◽  
Keyword(s):  
Stock Prices ◽  
Secondary Data ◽  
Variance Decomposition ◽  
Cointegration Analysis ◽  
Decomposition Approach ◽  
Vector Error Correction ◽  
Speed Of Adjustment ◽  
Vector Error ◽  
Long Run ◽  
Delegated Monitoring

This study adopts the Vector Error Correction Model (VECM) and the variance decomposition techniques in testing the financial acceleration theory in banks intermediation. The bank intermediation variable is categorized into variable deposit mobilization, loan administration, delegated monitoring and risk diversification. Using cointegration analysis and quarterly secondary data between 2009 and 2016, this study assessed the short and long run influence of the categorized bank activities on their stock prices. The results indicate that banks intermediation exact influence on both the short and long run stock prices of DMBs in Nigeria as the ECM (-0.1420) result showed a significant speed of adjustment towards equilibrium while the overall model fitness showed that there is a long run causality running from banks intermediation measures and stock prices. Similarly, the result of the variance decomposition of stock prices shocks indicate that over time a significantly increasing proportion of stock prices is explained by loans and capital (delegated monitoring).

scholarly journals Enhancing bank transparency: What role for the supervision authority?

2009 ◽  
Vol 56 (4) ◽  
pp. 435-452
Author(s):  
Francesco Giuli ◽  
Marco Manzo
Keyword(s):  
Adverse Selection ◽  
Necessary Conditions ◽  
Bond Market ◽  
Corporate Bond ◽  
Corporate Bond Market ◽  
The Core ◽  
Delegated Monitoring ◽  
Credit Worthiness ◽  
Adverse Selection Problem ◽  
Core Problem

We apply a three-tier hierarchical model of regulation, developed along the lines of Laffont and Tirole (1993), to an adverse selection problem in the corporate bond market. The bank brings the bonds to the market and informs the potential buyers about the bond risks; a unique benevolent public authority aims at maximising investors' welfare. The main goal is to investigate whether this unique authority is able to fully inform the market on a firm's true credit worthiness when banks, in order to recover doubtful credits, favour the placement of bonds issued by levered firms by concealing their true risk. By establishing the necessary conditions that allow optimal sanctions to produce the first best equilibrium, we show that the core problem of adverse selection in the corporate bond market does not lie so much in the benevolence of the delegated monitoring system, but rather in the possibility of affecting and sanctioning a firm's behavior.

LIQUIDITY, INTERBANK MARKET, AND THE SUPERVISORY ROLE OF THE CENTRAL BANK

2003 ◽  
Vol 7 (2) ◽  
pp. 192-211 ◽  
Author(s):  
Young Sik Kim
Keyword(s):  
Central Bank ◽  
Banking System ◽  
Central Banking ◽  
Bank Loans ◽  
Interbank Market ◽  
Monitoring Cost ◽  
Delegated Monitoring ◽  
The Individual ◽  
Cash Reserves

This paper provides an explanation for the supervisory role of the central bank in a monetary general equilibrium model of bank liquidity provision. Under incomplete information on the individual banks' liquidity needs, individual banks find it optimal to invest solely in bank loans holding no cash reserves, and rely on the interbank market for their withdrawal demands. Using the costly state verification approach under uncertainty in aggregate liquidity demands, the supervisory role of the central bank as a large intermediary arises as an incentive-compatible arrangement by which banks hold the correct level of cash reserves. First, it takes up a delegated monitoring role for the banking system. Second, it engages in discount-window lending at a penalty rate, where the discount margin covers exactly the monitoring cost incurred. Finally, under the central banking mechanism, currency premium no longer exists in the sense that currency is worth the same as deposits having an equal face value.

scholarly journals Bank Lending and Interest- Rate Derivatives

2017 ◽  
Vol 8 (4) ◽  
pp. 23 ◽  
Author(s):  
Fang Zhao ◽  
James Moser
Keyword(s):  
Interest Rate ◽  
Positive Association ◽  
Bank Lending ◽  
Futures Contracts ◽  
Forward Contracts ◽  
Interest Rate Options ◽  
Interest Rate Derivatives ◽  
Delegated Monitoring ◽  
Using Data ◽  
The Cost

Using data that cover a full business cycle, this paper documents a direct relationship between interest-rate derivative usage by U.S. banks and growth in their commercial and industrial (C&I) loan portfolios. This positive association holds for interest-rate options contracts, forward contracts, and futures contracts. This result is consistent with the implication of Diamond’s model (1984) that predicts that a bank’s use of derivatives permits better management of systematic risk exposure, thereby lowering the cost of delegated monitoring, and generates net benefits of intermediation services. The paper’s sample consists of all FDIC-insured commercial banks between 1996 and 2004 having total assets greater than $300 million and having a portfolio of C&I loans. The main results remain after a robustness check.

Delegated monitoring in crowdfunded microfinance: Evidence from Kiva

2021 ◽  
Vol 66 ◽  
pp. 101864
Author(s):  
John P. Berns ◽  
Abu Zafar M. Shahriar ◽  
Luisa A. Unda
Keyword(s):  
Delegated Monitoring

scholarly journals Integration of Financially Intermediated Services for Firm Growth A Micro Level Analysis form Pakistan

2020 ◽  
Vol 13 (4) ◽  
pp. 95-107
Author(s):  
Aijaz Mustafa Hashmi ◽  
Hassan Raza ◽  
Syed Asim Shah
Keyword(s):  
Information Sharing ◽  
Transaction Cost ◽  
Financial Institutions ◽  
Cost Reduction ◽  
Firm Growth ◽  
Panel Data Analysis ◽  
Assurance Services ◽  
Sharing Function ◽  
Delegated Monitoring ◽  
The Impact

Financial intermediation services offered by financial institutions facilitate the firms in smoothening their operations. This study considers the role of the intermediaries beyond the traditional savings and pooling of funds. It takes into account multiple intermediary services offered by financial institutions. These are inclusive of transaction cost reduction services, assurance of liquidity services, information sharing function, and facilitation for delegated monitoring. Firms benefit from these services. This study testifies the impact of financially intermediated functions on firm growth. The sample of the study includes 130 listed companies in the PSX. The analysis employs the Panel Data Analysis (PDA) technique. The results of Transaction Cost Reduction Services, Liquidity Assurance Services, and Information Sharing Services are found to have a statistically significant impact while the proxy for Delegated Monitoring Services offered by intermediaries is found to have an insignificant impact on firm growth. The significance of the integrated intermediation services reflects that firms utilizing the offered intermediary services are benefitted and firm growth is observed as a Fixed Effect.

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