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NEWSLETTER of February 2, 2018

 

The following content has been added at finexpert:


Studies > Corporate Finance

Ernst & Young

INITIAL COIN OFFERINGS

A lack of fundamental valuation and the due diligence process by potential investors is leading to extreme volatility of the initial coin offering (ICO) market, according to new research published by EY. The research also found that in some cases ICO investors are contributing capital at an average rate of over US$300,000 per second. The EY research, which studied 372 ICOs around the world, also found that the offerings raised US$3.7b1 in funds, twice the volume of VC investments in blockchain projects. Furthermore, the US is leading the race with the highest volume of ICOs originating from the country (over US$1b). Russia and China follow, with each over US$300m. >more

Studies > Performance

Oliver Wyman

THE STATE OF THE FINANCIAL SERVICES INDUSTRY 2018

The Oliver Wyman State of the Financial Services Industry 2018 report finds that while financial services incumbents have largely recovered towards relative health ten years on from the financial crisis and conditions have improved significantly, there is a gnawing sense of concern regarding the prospects for future underlying industry growth. >more

Studies > Performance

Bain & Company

DEUTSCHLANDS BANKEN 2017: METAMORPHOSE IM LAUFENDEN BETRIEB

The structural change in the banking sector continues with increasing speed: on average, 36 bank branches close down operations every week in Germany and one bank even leaves the market. At the same time, the number of employees in the banking industry is falling by more than 400 per week. >more

Studies > Macro

European Central Bank

THE EURO AREA BANK LENDING SURVEY: Q4 2017

According to the January 2018 bank lending survey (BLS), credit standards for loans to enterprises were unchanged in the fourth quarter of 2017, in line with expectations in the previous survey round. By contrast, credit standards on loans to households for house purchase continued to ease, at a pace which was stronger than expected in the previous survey round. Credit standards on consumer credit and other lending to households were broadly unchanged, despite easing expectations in the previous round. >more


Research Papers > Corporate Finance

DESTRUCTIVE CREATION AT WORK: HOW FINANCIAL DISTRESS SPURS ENTREPRENEURSHIP

Tania Babina
2017
Using US Census employer-employee matched data, I show that employer financial distress accelerates the exit of employees to found start-ups. This effect is particularly evident when distressed firms are less able to enforce contracts restricting employee mobility into competing firms. Entrepreneurs exiting financially distressed employers earn higher wages prior to the exit and after founding start-ups, compared to entrepreneurs exiting non-distressed firms. Consistent with distressed firms losing higher-quality workers, their start-ups have higher average employment and payroll growth. The results suggest that the social costs of distress might be lower than the private costs to financially distressed firms. >more

Research Papers  > Risk Management

THE MISSING RISK PREMIUM IN EXCHANGE RATES

Magnus Dahlquist, and Julien Penasse
2017
It is well known that the interest rate differential (the forward premium) predicts currency returns. However, we find that the real exchange rate, not the interest rate differential, is the main predictor of currency returns at longer horizons. We relate this finding to other puzzling features of currency markets, namely that the real exchange rate contemporaneously appreciates with the interest rate differential and that the positive relationship between currency risk premia and the interest rate differential reverses over longer horizons. Models in which the currency risk premium depends on the interest rate differential and a missing risk premium, capturing deviations from the purchasing power parity, can rationalize these observations. >more