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NEWSLETTER of April 20, 2018

 

The following content has been added at finexpert:


Studies > Corporate Finance

European Investment Bank

FINANCING THE DEEP TECH REVOLUTION

The European Investment Bank (EIB), with Oliver Wyman’s support, has developed and published a study on “Financing the Deep Tech Revolution”, identifying the obstacles to access-to-finance for deep tech companies as well as recommending policy measures to address them. >more

Studies > Corporate Finance

McKinsey & Company

MCKINSEY ON FINANCE: PERSPECTIVES ON CORPORATE FINANCE AND STRATEGY (NUMBER 65)

McKinsey on Finance offers practical ways of thinking about corporate finance based on McKinsey's experience and proprietary research. Topics in this issue include: "Bots, algorithms, and the future of the finance function"; "Looking behind the numbers for US stock indexes", and "How to know when better profit margins aren’t better for your company". >more

Studies > Performance

PwC

OUTSOURCING 3.0: LICENSED FINTECHS DRIVING GROWTH AND EFFICIENCY FOR BANKS

Together with PwC, FinLeap has published a whitepaper to explore current outsourcing trends for banks in Germany and the new providers entering the market in relation to the financial services industry. The partnerships from the established banks and outsourcing partners range from relationships with corporate companies such as IBM or Google, start-ups, and BaFin licensed fintechs. And the results show increasing use of outsourcing within the financial industry in order to drive efficiency and flexibility in traditional financial services business models. Flexible fintechs, who along with financial institutions, are taking the approach of co-operation as oppose to competition. >more

Studies > Macro

International Monetary Fund (IMF)

WORLD ECONOMIC OUTLOOK: APRIL 2018

The global economic upswing that began around mid-2016 has become broader and stronger. This new World Economic Outlook report projects that advanced economies as a group will continue to expand above their potential growth rates this year and next before decelerating, while growth in emerging market and developing economies will rise before leveling off. For most countries, current favorable growth rates will not last. Policymakers should seize this opportunity to bolster growth, make it more durable, and equip their governments better to counter the next downturn. >more


Research Papers > Corporate Finance

LENDING STANDARDS OVER THE CREDIT CYCLE

Giacomo Rodano, Nicolas Andre Benigno Serrano-Velarde, and Emanuele Tarantino
2018
We empirically identify the lending standards applied by banks to small and medium firms over the cycle. We exploit an institutional feature of the Italian credit market that generates a sharp discontinuity in the allocation of comparable firms into credit risk categories. Using loan-level data, we show that during the expansionary phase of the cycle, banks relax lending standards by narrowing the interest rate spreads between substandard and performing firms. During the contractionary phase of the cycle, the abrupt tightening of lending standards leads to the exclusion of substandard firms from credit. These firms then report significantly lower production, investment, and employment. Finally, we find that the drying up of the interbank market is an important factor determining the change in bank lending standards. >more

Research Papers > Corporate Valuation

FIVE CONCERNS WITH THE FIVE-FACTOR MODEL

David Blitz, Matthias X. Hanauer, Milan Vidojevic, and Pim van Vliet
2017
Fama and French (2015) propose to augment their classic (1993) 3-factor model with profitability and investment factors, resulting in a 5-factor model, which is likely to become the new benchmark for asset pricing studies. Although the 5-factor model exhibits significantly improved explanatory power, we identify five concerns with regard to the new model. First, it maintains the CAPM relation between market beta and return, despite mounting evidence that the empirical relation is flat, or even negative. Second, it continues to ignore the, by now, widely accepted momentum effect. Third, there are a number of robustness concerns with regard to the two new factors. Fourth, whereas risk-based explanations were key for justifying the factors in the 3-factor model, the economic rationale for the two new factors is much less clear. Fifth and finally, it does not seem likely that the 5-factor model is going to settle the main asset pricing debates or lead to consensus. >more