
Risk Management in Financial Institutions
Publication
, Journal Article
Rampini, AA; Viswanathan, S; Vuillemey, G
Published in: Journal of Finance
April 1, 2020
We study risk management in financial institutions using data on hedging of interest rate and foreign exchange risk. We find strong evidence that institutions with higher net worth hedge more, controlling for risk exposures, across institutions and within institutions over time. For identification, we exploit net worth shocks resulting from loan losses due to declines in house prices. Institutions that sustain such shocks reduce hedging significantly relative to otherwise-similar institutions. The reduction in hedging is differentially larger among institutions with high real estate exposure. The evidence is consistent with the theory that financial constraints impede both financing and hedging.
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Published In
Journal of Finance
DOI
EISSN
1540-6261
ISSN
0022-1082
Publication Date
April 1, 2020
Volume
75
Issue
2
Start / End Page
591 / 637
Related Subject Headings
- Finance
- 1502 Banking, Finance and Investment
Citation
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Rampini, A. A., Viswanathan, S., & Vuillemey, G. (2020). Risk Management in Financial Institutions. Journal of Finance, 75(2), 591–637. https://doi.org/10.1111/jofi.12868
Rampini, A. A., S. Viswanathan, and G. Vuillemey. “Risk Management in Financial Institutions.” Journal of Finance 75, no. 2 (April 1, 2020): 591–637. https://doi.org/10.1111/jofi.12868.
Rampini AA, Viswanathan S, Vuillemey G. Risk Management in Financial Institutions. Journal of Finance. 2020 Apr 1;75(2):591–637.
Rampini, A. A., et al. “Risk Management in Financial Institutions.” Journal of Finance, vol. 75, no. 2, Apr. 2020, pp. 591–637. Scopus, doi:10.1111/jofi.12868.
Rampini AA, Viswanathan S, Vuillemey G. Risk Management in Financial Institutions. Journal of Finance. 2020 Apr 1;75(2):591–637.

Published In
Journal of Finance
DOI
EISSN
1540-6261
ISSN
0022-1082
Publication Date
April 1, 2020
Volume
75
Issue
2
Start / End Page
591 / 637
Related Subject Headings
- Finance
- 1502 Banking, Finance and Investment