US REITs' Returns Sensitivity to Interest Rates after the Global Financial Crisis

The preceding chapters have examined the deepened integration of emerging and developing economies (EDEs) into the international financial system in the new millennium and their changing vulnerabilities to external financial shocks. They have discussed the role that policies in advanced economies played in this process, including those that culminated in the global financial crisis and the unconventional monetary policy of zero-bound interest rates and quantitative easing adopted in response to the crisis, as well as policies in EDEs themselves....

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Determinants of Spot and Forward Interest Rates in Brazil in an International Liquidity Scenario: An Econometric Analysis for the Period 2007-2019

International Journal of Applied Economics Finance and Accounting ◽

10.33094/8.2017.2021.101.19.31 ◽

2021 ◽

Vol 10 (1) ◽

pp. 19

Author(s):

Pedro Raffy Vartanian ◽

Sérgio Gozzi Citro ◽

Paulo Rogério Scarano

Keyword(s):

Financial Crisis ◽

Interest Rates ◽

Global Financial Crisis ◽

International Liquidity ◽

Vector Autoregressive ◽

International Financial Crises ◽

International Financial Crisis ◽

Level Of Activity ◽

Systemic Crisis ◽

The Global Financial Crisis

Over the last 25 years, Brazil has been among the countries with the highest interest rates globally. High interest rates have been necessary during several recent times, such as in the period from 1997 to 1999, due to the repeated international financial crises that have plagued the country. From 1999, a sustained path of interest rate reduction begun. With the outbreak of the 2008 international financial crisis, the Brazilian monetary authorities promoted a new round of falling domestic interest rates in response to the recessive effects and the threat of a systemic crisis that could hang over the national financial system. In 2012, a set of interventionist nature policies led to a decrease in the Selic rate. Thus, looking at the last 25 years, it appears that many factors have started to influence the trajectory of Brazilian interest rates. In this context, the present work aims to identify, based on empirical research, the determinants of spot and future interest rates. As a methodology, the research uses a multivariate econometric vector autoregressive model (VAR) with error correction (VEC). The analysis covers the years 2017 to 2019, corresponding to the period in the aftermath of the global financial crisis of 2008. The results evidence that both the spot rate and the DI future can be determined by the fluctuations in the level of inflation and by the level of activity and the real exchange rate, in addition to the effects of the lagged variables themselves.

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An Investigation into the Fundamental Drivers of Pricing of Residential Mortgage Products – A Risk Pricing Viewpoint

Construction Economics and Building ◽

10.5130/ajceb.v10i4.1884 ◽

2010 ◽

Vol 10 (4) ◽

pp. 60-72

Author(s):

Harry M Karamujic

Keyword(s):

Financial Crisis ◽

Interest Rates ◽

Financial Institutions ◽

Global Financial Crisis ◽

Exact Science ◽

Residential Mortgage ◽

Risk Pricing ◽

Price Risks ◽

The Global Financial Crisis ◽

Underlying Theme

Residential mortgage products (also known as home loans) pricing has been long understood to be something of a ‘dark art’, requiring judgment and experience, rather than being an exact science. In the last decade, a lot has changed in this field and more and more lenders, primarily the larger lenders, are increasingly looking to make their pricing as exact as possible. Even so, inadequate pricing of residential mortgage products (in particular its substandard risk pricing) has been seen as one of major causes of the global financial crisis (GFC) and subsequent spectacular banking collapses. The underlying theme of the paper is to exhibit how contemporary lenders, in practice, price their residential mortgage products. While discussing elements of the pricing calculation particular attention was given to the exposition of how contemporary lenders price risks involved in providing home loans. Because of the importance of Basel capital accords to how financial institutions assess and quantify their risks, the paper provides an overview of Basel capital accords. The author envisages that the paper will (i) help enhance comprehension of the underlying elements of the pricing calculation and the ways in which these elements relate to each other, (ii) scrutinize how contemporary lenders identify and quantify risks and (iii) improve consciousness of future changes in interest rates

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Assessing The Impact Of The Global Financial Crisis On GCC Countries

Journal of Business & Economics Research (JBER) ◽

10.19030/jber.v8i2.682 ◽

2010 ◽

Vol 8 (2) ◽

Cited By ~ 4

Author(s):

Hisham H. Abdelbaki

Keyword(s):

Financial Crisis ◽

Interest Rates ◽

Global Financial Crisis ◽

The United States ◽

Font Size ◽

Negative Effects ◽

Gcc Countries ◽

The World ◽

The Global Financial Crisis ◽

The Impact

No doubt, the international financial crisis that started in the United States of America will cast its effects on all countries of the world, developed and developing. Yet these effects vary from one country to another for several reasons. The GCC countries would not escape these negative effects of this severe crisis. The negative effects of the crisis on gulf countries come from many aspects: first, decrease in price of oil on whose revenues the development programs in these countries depend; second, decrease in the value of US$ and the subsequent decrease in the assets owned by these countries in US$; third, a case of economic stagnation will prevail in the world with effects starting to appear. It is obvious that this would be reflected on the real sector in the economies causing a series of negative effects through decrease of the world demand for exports of GCC countries of oil, petrochemicals and aluminum.  Lastly, increased inflation rates with decreased interest rates will result in a decrease in real interest with an accompanying decrease in incentives for saving and consequently investment and economic development. The main aim of the research is to assess the economic effects of the global financial crisis on GCC countries. The paper results are that the big reserves of foreign currencies achieved by the GCC countries in the past few years have helped increase their ability to bear the effects of the financial effects on one hand and their ability to adopt expansionary policies through pumping liquidity to absorb the regressive effects of the crisis on the other. The paper recommends the necessity of taking precautionary procedures for the effects which will result from the expansionary policies effective in GCC countries.

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The Impact of the Global Financial Crisis on Central Banking

The Oxford Handbook of the Economics of Central Banking ◽

10.1093/oxfordhb/9780190626198.013.6 ◽

2019 ◽

pp. 170-192

Author(s):

Alex Cukierman

Keyword(s):

Financial Crisis ◽

Interest Rates ◽

Financial Stability ◽

Inflation Targeting ◽

Global Financial Crisis ◽

The United States ◽

Central Banking ◽

The Global Financial Crisis ◽

The Impact ◽

Regulatory Reforms

This chapter describes the impacts of the global financial crisis on monetary policy and institutions. It argues that during the crisis, financial stability took precedence over traditional inflation targeting and discusses the emergence of unconventional policy instruments such as quantitative easing (QE), forex market interventions, negative interest rates, and forward guidance. It describes the interaction between the zero lower bound (ZLB) and QE, and proposals, such as raising the inflation target, to alleviate the ZLB constraint. The chapter discusses the consequences of the relative passivity of fiscal policies, “helicopter money,” and 100 percent reserve requirement. The crisis triggered regulatory reforms in which central banks’ objectives were expanded to encompass macroprudential regulation. The chapter evaluates recent regulatory reforms in the United States, the euro area, and the United Kingdom. It presents data on new net credit formation during the crisis and discusses implications for exit policies.

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Corporate Change After the Global Financial Crisis

Credit and Capital Markets – Kredit und Kapital ◽

10.3790/ccm.53.2.245 ◽

2020 ◽

Vol 53 (2) ◽

pp. 245-271

Author(s):

Ivo Arnold

Keyword(s):

Financial Crisis ◽

Interest Rates ◽

Business Model ◽

Global Financial Crisis ◽

Jel Classification ◽

Long Run ◽

Corporate Change ◽

History Of ◽

Using Data ◽

The Global Financial Crisis

Abstract This paper examines the strategic response of the Dutch bank ING to the global financial crisis. Prior to the crisis, ING was a prominent global exponent of direct banking, using the so-called pure play internet (PPI) business model. PPI banking is a hybrid business model that combines features of relationship and transaction banking. Downsides of this business model are that it may lead to overexposure in securities and that it may attract savers that have an above-average sensitivity to interest rates or risk. Using data on the geographical activities of ING, the timeline of relevant events in the history of ING and strategy statements of ING management, we examine how ING has responded to the strategic challenges of the crisis. We conclude that PPI banking should be viewed more as a market penetration strategy than as a full-blown business model that is tenable in the long run. JEL Classification: G01, G21

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Monetary policy responses to the global financial crisis: A case study of Egypt

Corporate Board role duties and composition ◽

10.22495/cbv7i3art5 ◽

2011 ◽

Vol 7 (3) ◽

pp. 65-78

Author(s):

Monal Abdel-Baki

Keyword(s):

Monetary Policy ◽

Financial Crisis ◽

Interest Rates ◽

Global Financial Crisis ◽

Reserve Requirements ◽

Long Run ◽

Dynamic Stochastic ◽

The Global Financial Crisis ◽

The Arab Spring

Among the triggers of the Arab Spring are the declining living standards of the middle and lower income groups. Undoubtedly, the global financial crisis (GFC) is to be partially blamed for weakening the economies of these nations. But was monetary policy ineffective in combating inflation and reducing the meltdown? This paper employs a dynamic stochastic general equilibrium model to assess the effectiveness of the monetary policy in the wake of the GFC. Egypt is selected as a case study due to its overdependence on imported food, the prices of which are relentlessly soaring. The results of the study reveal that the ideal operating targets for the Central Bank of Egypt are the overnight rate and legal reserve requirements. Interest rates are more suitable for long-run impact on the ultimate goals of growth, price stability and job creation. The study culminates in designing a framework to enhance central bankers’ political independence and transparency, which is imperative for nations with high levels of corruption. The study is not only informative to the new Egyptian policymakers, but also to other developing and emerging economies that suffer from symptoms of chronic inflation and looming socio-political turmoil.

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The global financial crisis: Implications for capital to agribusiness

Applied Studies in Agribusiness and Commerce ◽

10.19041/apstract/2012/1-2/7 ◽

2012 ◽

Vol 6 (1-2) ◽

pp. 59-62

Author(s):

Bruce L. Ahrendsen

Keyword(s):

Financial Crisis ◽

Interest Rates ◽

Global Economy ◽

Global Financial Crisis ◽

Balance Sheet ◽

The United States ◽

The European Union ◽

Financial Obligations ◽

General Business ◽

The Global Financial Crisis

The global economy has continued to experience lingering effects of the global financial crisis that began in 2007. Although attention was initially given to the liquidity crisis and survival of some the world’s largest corporations and institutions, the financial crisis is likely to have long-lasting implications for agribusiness. As the world slowly recovers from the crisis, another round of problems are emerging as governments and international institutions attempt to unwind the positions they took in an effort to prevent the global economic bubble from bursting. Perhaps the most problematic factor for businesses is access to capital in sufficient amounts and at affordable rates. Governments and institutions, particularly in the United States (U.S.) and the European Union, have increased their financial obligations as the result of activities taken to curtail the economic crisis. These financial obligations and the associated financial risks place pressure on financial markets and tend to restrain the availability of capital and increase the cost of capital for businesses. However, the U.S. agricultural credit market has not experienced problems to the same extent as general business (commercial and industrial) and real estate credit markets have. In general, U.S. farm businesses have a strong balance sheet, adequate repayment capacity, sufficient amount of assets to offer collateral for loans, and reasonable profits. Thus, U.S. farm businesses have had an ample supply of credit at relatively low interest rates.

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The Global Financial Crisis and Retail Interest Rate Pass-Through in Australia

Review of Pacific Basin Financial Markets and Policies ◽

10.1142/s0219091516500260 ◽

2016 ◽

Vol 19 (04) ◽

pp. 1650026 ◽

Cited By ~ 3

Author(s):

Ming-Hua Liu ◽

Dimitris Margaritis ◽

Zhuo Qiao

Keyword(s):

Interest Rate ◽

Financial Crisis ◽

Small Business ◽

Interest Rates ◽

Global Financial Crisis ◽

Small Business Lending ◽

Lending Rates ◽

Pass Through ◽

The Global Financial Crisis ◽

The Way

In this paper, we examine the impact of the global financial crisis (GFC) on the interest rate pass-through for four types of loans in Australia: mortgages, residentially secured small business lending, nonsecured small business lending and personal loans. Australia is an interesting case study since its central bank lowered but also raised interest rates during the GFC. We find that after the onset of the crisis, there has been a shift in the way banks adjust their lending rates in response to changes in market interest rates; the markup has increased and there has been a drop in both short- and long-term pass-through from funding costs to lending rates. Closer analysis indicates that the drop in short-term pass-through is due to the slower response of banks to increases in funding costs. We also find asymmetries in the way banks adjust lending rates in relation to funding costs in the long-run for nonsecured small business lending and personal loans. The evidence shows that banks in Australia tightened lending standards and competed less aggressively for loans but more for deposits in response to heightened default risks following the global financial crisis. The wider margin allows banks to adjust their lending rates more slowly and asymmetrically.

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Conclusion

Banks, Exchanges, and Regulators ◽

10.1093/oso/9780199553730.003.0020 ◽

2020 ◽

pp. 601-609

Author(s):

Ranald C. Michie

Keyword(s):

Financial Crisis ◽

Interest Rates ◽

Global Financial Crisis ◽

Low Cost ◽

Financial System ◽

Central Banks ◽

Financial Instruments ◽

The Stability ◽

The Global Financial Crisis

The Global Financial Crisis that took place in 2007–9 was the product of both long-term trends and a specific set of circumstances. In particular, the thirty years preceding that crisis had witnessed a refashioning of the global financial system, which was, itself, a reaction to that which had emerged after the Second World War. Over those thirty years competitive markets gradually replaced governments and central banks in determining the volume and direction of international financial flows. The interaction within and between economies took place on a daily basis through the markets for short-term credit, long-term loans, foreign exchange, securities, and a growing array of ever more complex financial instruments that allowed risks to be hedged whether in terms of interest rates, currencies, exposure to counterparties, or other variables. This was a period of great innovation as new financial instruments were created in order to match the needs of lenders for high returns, certainty, and stability and those of borrowers for low cost finance and flexibility in terms of the amount, currency, and timing of repayment. Nevertheless, governments remained heavily involved through the role played by regulators and central banks, generating confidence in the stability of the new financial system. That confidence was destroyed by the Global Financial Crisis of 2008 and had not been rebuilt by 2020.

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