Abstract
The secured borrowing based on sell/buy-backs agreements is studied,
specifically considering both: quantity and price. The empirical evidence
presented in this paper suggests that, after controlling for specific individual
characteristics, group-specific effects (defined by belonging or not to a financial
group) play a relevant role in this market. Using spatial panel data models, we
find that the amount of liquidity obtained with sell/buy-backs depend on
traditional determinants (institution’s size and financial leverage), but also, on the average size of the financial group to which the financial institution belongs.
Similarly, the borrowing cost depends on the amount of liquidity, but the average
profitability of the financial group is also significant. Our results are robust to
different relationship structures specified for financial groups.
specifically considering both: quantity and price. The empirical evidence
presented in this paper suggests that, after controlling for specific individual
characteristics, group-specific effects (defined by belonging or not to a financial
group) play a relevant role in this market. Using spatial panel data models, we
find that the amount of liquidity obtained with sell/buy-backs depend on
traditional determinants (institution’s size and financial leverage), but also, on the average size of the financial group to which the financial institution belongs.
Similarly, the borrowing cost depends on the amount of liquidity, but the average
profitability of the financial group is also significant. Our results are robust to
different relationship structures specified for financial groups.
| Original language | English |
|---|---|
| Place of Publication | Tilburg |
| Publisher | CentER, Center for Economic Research |
| Number of pages | 35 |
| Volume | 2018-015 |
| Publication status | Published - 23 Apr 2018 |
Publication series
| Name | CentER Discussion Paper |
|---|---|
| Volume | 2018-015 |
Keywords
- funding costs
- short-term liquidity
- spatial panel data models