skip to content

Cambridge Finance

 
Subscribe to Cambridge Finanace Workshop Series feed
Cambridge Finance coordinates the programmes of research and study in all areas of finance across the University of Cambridge. Its members are grouped in a number of Centres: Centre for Corporate and Commercial Law (3CL), Centre for Financial Analysis and Policy (CFAP), Centre for Financial Research (CFR), Centre for International Macroeconomics & Finance (CIMF), CJBS Finance & Accouting Group (JBSF), Real Estate Finance(REF), Centre for Financial History (CFH). The Seminar series is usually on a Thursday during term time, at 5.00pm.
Updated: 9 min 12 sec ago

Thu 19 May 13:00: Title to be confirmed

Wed, 15/09/2021 - 10:30
Title to be confirmed

Abstract not available

Add to your calendar or Include in your list

Thu 16 Jun 13:00: Title to be confirmed

Wed, 08/09/2021 - 13:49
Title to be confirmed

Abstract not available

Add to your calendar or Include in your list

Thu 09 Jun 13:00: Title to be confirmed

Wed, 08/09/2021 - 13:44
Title to be confirmed

Abstract not available

Add to your calendar or Include in your list

Thu 19 May 13:00: Title to be confirmed

Wed, 08/09/2021 - 13:41
Title to be confirmed

Abstract not available

Add to your calendar or Include in your list

Thu 05 May 13:00: Title to be confirmed

Wed, 08/09/2021 - 13:39
Title to be confirmed

Abstract not available

Add to your calendar or Include in your list

Thu 10 Mar 13:00: Title to be confirmed

Wed, 08/09/2021 - 13:37
Title to be confirmed

Abstract not available

Add to your calendar or Include in your list

Thu 14 Oct 13:00: The Aggregate Consequences of Forbearance Lending: Evidence from Japan

Wed, 08/09/2021 - 13:01
The Aggregate Consequences of Forbearance Lending: Evidence from Japan

We study the impact of forbearance on aggregate economic performance in Japan over the period 2007-2017. Forbearance is a practice whereby banks accommodate bad borrowers instead of terminating their loans, with negative consequences for aggregate productivity. The Japanese policy response to the global financial crisis of 2007-2008 (SME Financing Facilitation Act) has revived this practice. Our novel theory-driven empirical approach enables us to perform a quantitative assessment of the aggregate impact of forbearance, including its positive effects, namely the avoidance of a large number of bankruptcies and increased unemployment. We develop a search-theoretic model of credit markets with severance costs that capture forbearance frictions and estimate those frictions using the Tokyo Shoko Research (TSR) dataset. Our estimates indicate a marked increase in forbearance frictions from 2010 onwards, suggesting that the SME Financing Facilitation Act of 2009 has revived the practice of forbearance in Japan. Our counterfactual exercises indicate that, in the absence of forbearance, the capital productivity of survivors would on average be 4.22% higher. On average, there would be 6.89% fewer jobs and 3.93% fewer firms. Finally, we provide regression-based evidence in support of our channel. First, we relate our estimates of forbearance frictions to the zombieness measure of Caballero, Hoshi and Kashyap (2008), and show that higher frictions are associated with a higher probability that a firm is classified as a zombie firm. Second, we exploit geographical variation in search frictions across Japanese prefectures to show that forbearance frictions are more significant when search frictions are more stringent. This shows that our model captures a unique margin in the data, which is not explained by models that are not based on search and matching.

Add to your calendar or Include in your list

Thu 24 Feb 13:00: Title to be confirmed

Wed, 08/09/2021 - 13:00
Title to be confirmed

Abstract not available

Add to your calendar or Include in your list

Thu 10 Feb 13:00: Title to be confirmed

Wed, 08/09/2021 - 12:54
Title to be confirmed

Abstract not available

Add to your calendar or Include in your list

Thu 27 Jan 13:00: Title to be confirmed

Wed, 08/09/2021 - 12:18
Title to be confirmed

Abstract not available

Add to your calendar or Include in your list

Thu 25 Nov 13:00: Title to be confirmed

Wed, 08/09/2021 - 12:17
Title to be confirmed

Abstract not available

Add to your calendar or Include in your list

Thu 11 Nov 13:00: Title to be confirmed

Tue, 07/09/2021 - 15:48
Title to be confirmed

Abstract not available

Add to your calendar or Include in your list

Thu 28 Oct 13:00: Title to be confirmed

Mon, 06/09/2021 - 16:05
Title to be confirmed

Abstract not available

Add to your calendar or Include in your list

Thu 14 Oct 13:00: The Aggregate Consequences of Forbearance Lending: Evidence from Japan

Mon, 06/09/2021 - 11:37
The Aggregate Consequences of Forbearance Lending: Evidence from Japan

We study the impact of forbearance on aggregate economic performance in Japan over the period 2007-2017. Forbearance is a practice whereby banks accommodate bad borrowers instead of terminating their loans, with negative consequences for aggregate productivity. The Japanese policy response to the global financial crisis of 2007-2008 (SME Financing Facilitation Act) has revived this practice. Our novel theory-driven empirical approach enables us to perform a quantitative assessment of the aggregate impact of forbearance, including its positive effects, namely the avoidance of a large number of bankruptcies and increased unemployment. We develop a search-theoretic model of credit markets with severance costs that capture forbearance frictions and estimate those frictions using the Tokyo Shoko Research (TSR) dataset. Our estimates indicate a marked increase in forbearance frictions from 2010 onwards, suggesting that the SME Financing Facilitation Act of 2009 has revived the practice of forbearance in Japan. Our counterfactual exercises indicate that, in the absence of forbearance, the capital productivity of survivors would on average be 4.22% higher. On average, there would be 6.89% fewer jobs and 3.93% fewer firms. Finally, we provide regression-based evidence in support of our channel. First, we relate our estimates of forbearance frictions to the zombieness measure of Caballero, Hoshi and Kashyap (2008), and show that higher frictions are associated with a higher probability that a firm is classified as a zombie firm. Second, we exploit geographical variation in search frictions across Japanese prefectures to show that forbearance frictions are more significant when search frictions are more stringent. This shows that our model captures a unique margin in the data, which is not explained by models that are not based on search and matching.

Add to your calendar or Include in your list

Mo Tu We Th Fr Sa Su
 
 
1
 
2
 
3
 
4
 
5
 
6
 
7
 
8
 
9
 
10
 
11
 
12
 
13
 
14
 
15
 
16
 
17
 
18
 
19
 
20
 
21
 
22
 
23
 
24
 
25
 
26
 
27
 
28
 
29
 
30