22.Off-balance-sheet activity under adverse selection外文翻译.pdfVIP

Journal of Economic Behavior Organization 85 (2013) 176–190 Contents lists available at SciVerse ScienceDirect Journal of Economic Behavior Organization j o u r n a l h o me p a g e: w w w. elsev /locate/jeb o Off-balance-sheet activity under adverse selection: The European experience Miguel A. Duran ∗ , Ana Lozano-Vivas 1 University of Malaga (Spain), Dpt. Teoria e Historia Economica, Facultad de Economicas, Campus de El Ejido, 29013 Malaga, Spain a r t i c l e i n f o a b s t r a c t Article history: In the crisis that started in 2007, banks’ off-balance sheet activity has been blamed for flood- Received 31 August 2011 ing the market with low-quality assets and contributing to spreading risk throughout the Received in revised form economic system. Nevertheless, this view is hardly sustainable within the context of sophis- 22 December 2011 ticated markets. This paper puts forward an alternative interpretation of the off-balance Accepted 13 April 2012 sheet market, the so-called adverse selection hypothesis. According to this hypothesis, an Available online 23 April 2012 adverse selection problem characterizes the relation between banks and their counter- JEL classification: parties in off-balance sheet deals. Empirically, this implies that off-balance sheet activity D82 is expected to be negatively related to failure risk, whereas it is expected