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- Publisher Website: 10.1093/rfs/hhz067
- Scopus: eid_2-s2.0-85091612844
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Article: Do Financial Regulations Shape the Functioning of Financial Institutions’ Risk Management in Asset-Backed Securities Investment?
Title | Do Financial Regulations Shape the Functioning of Financial Institutions’ Risk Management in Asset-Backed Securities Investment? |
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Authors | |
Issue Date | 2020 |
Publisher | Oxford University Press. The Journal's web site is located at http://rfs.oxfordjournals.org/ |
Citation | The Review of Financial Studies, 2020, v. 33 n. 6, p. 2506-2553 How to Cite? |
Abstract | We show that installing stronger risk management into financial institutions—a proposal widely discussed following the 2008 financial crisis—is insufficient to constrain institutions’ exposure to investment with lurking risk, such as asset-backed securities (ABS). Regulations affect the functioning of risk management: risk management constrains institutions’ exposure to risky ABS when they face mark-to-market reporting combined with capital requirements; however, this role is considerably weaker when capital requirements are combined with historical cost accounting. We find suggestive evidence that financial regulations affect risk management functions through promoting risk managers’ efforts in uncovering ABS risk and curbing executives’ incentives to take excessive risk. |
Persistent Identifier | http://hdl.handle.net/10722/279014 |
ISSN | 2023 Impact Factor: 6.8 2023 SCImago Journal Rankings: 17.654 |
ISI Accession Number ID |
DC Field | Value | Language |
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dc.contributor.author | Chen, X | - |
dc.contributor.author | Higgins, E | - |
dc.contributor.author | Xia, H | - |
dc.contributor.author | Zou, H | - |
dc.date.accessioned | 2019-10-21T02:18:03Z | - |
dc.date.available | 2019-10-21T02:18:03Z | - |
dc.date.issued | 2020 | - |
dc.identifier.citation | The Review of Financial Studies, 2020, v. 33 n. 6, p. 2506-2553 | - |
dc.identifier.issn | 0893-9454 | - |
dc.identifier.uri | http://hdl.handle.net/10722/279014 | - |
dc.description.abstract | We show that installing stronger risk management into financial institutions—a proposal widely discussed following the 2008 financial crisis—is insufficient to constrain institutions’ exposure to investment with lurking risk, such as asset-backed securities (ABS). Regulations affect the functioning of risk management: risk management constrains institutions’ exposure to risky ABS when they face mark-to-market reporting combined with capital requirements; however, this role is considerably weaker when capital requirements are combined with historical cost accounting. We find suggestive evidence that financial regulations affect risk management functions through promoting risk managers’ efforts in uncovering ABS risk and curbing executives’ incentives to take excessive risk. | - |
dc.language | eng | - |
dc.publisher | Oxford University Press. The Journal's web site is located at http://rfs.oxfordjournals.org/ | - |
dc.relation.ispartof | The Review of Financial Studies | - |
dc.rights | Pre-print: Journal Title] ©: [year] [owner as specified on the article] Published by Oxford University Press [on behalf of xxxxxx]. All rights reserved. Pre-print (Once an article is published, preprint notice should be amended to): This is an electronic version of an article published in [include the complete citation information for the final version of the Article as published in the print edition of the Journal.] Post-print: This is a pre-copy-editing, author-produced PDF of an article accepted for publication in [insert journal title] following peer review. The definitive publisher-authenticated version [insert complete citation information here] is available online at: xxxxxxx [insert URL that the author will receive upon publication here]. | - |
dc.title | Do Financial Regulations Shape the Functioning of Financial Institutions’ Risk Management in Asset-Backed Securities Investment? | - |
dc.type | Article | - |
dc.identifier.email | Zou, H: hongzou@hku.hk | - |
dc.identifier.authority | Zou, H=rp01800 | - |
dc.description.nature | link_to_subscribed_fulltext | - |
dc.identifier.doi | 10.1093/rfs/hhz067 | - |
dc.identifier.scopus | eid_2-s2.0-85091612844 | - |
dc.identifier.hkuros | 308083 | - |
dc.identifier.volume | 33 | - |
dc.identifier.issue | 6 | - |
dc.identifier.spage | 2506 | - |
dc.identifier.epage | 2553 | - |
dc.identifier.isi | WOS:000536040500004 | - |
dc.publisher.place | United Kingdom | - |
dc.identifier.issnl | 0893-9454 | - |