The Effect of Leverage on Asset Sales Between Financial Institutions

Sonali Das

No 2017/200, IMF Working Papers from International Monetary Fund

Abstract: This paper analyzes how the leverage of financial institutions affects their demand for assets and the resulting value of transactions between financial institutions. The results show a positive relationship between buyer capital and the likelihood of buying assets, and between buyer capital and the value of the deal. That is, those institutions that are the least constrained in their ability to raise funding are those that demand assets and pay more for them. This result does not hold, however, for deposit-taking institutions that had access to several government programs designed to improve their liquidity position during the crisis of 2008.

Keywords: WP; asset; buyer; capital; value; Asset sales; financial intermediaries; balance sheets; leverage; deal value; buyer asset growth; asset-market liquidity; buyer assets; buyer market assets; assets ratio; buyer log; asset liquidation; property assets; Capital adequacy requirements; Asset valuation; Agroindustries; Stock markets; Asset management; Global (search for similar items in EconPapers)
Pages: 17
Date: 2017-09-08
References: Add references at CitEc
Citations:

Downloads: (external link)
http://www.imf.org/external/pubs/cat/longres.aspx?sk=45207 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:imf:imfwpa:2017/200

Ordering information: This working paper can be ordered from
http://www.imf.org/external/pubs/pubs/ord_info.htm

Access Statistics for this paper

More papers in IMF Working Papers from International Monetary Fund International Monetary Fund, Washington, DC USA. Contact information at EDIRC.
Bibliographic data for series maintained by Akshay Modi ().