Creditor coordination with social learning and endogenous timing of credit decisions

In case of multiple source lending even solvent firms may be forced into bankruptcy due to uncoordinated credit withdrawals of their lenders. This paper analyzes whether a debtor firm can thwart such inefficient liquidations by offering creditors the option to delay their foreclosure decision rather than obliging them to simultaneous actions as suggested by Morris and Shin (2004). With this option, lenders can endogenously determine the timing of their credit decisions, trading of the informational benefit from waiting against the associated cost of delay. Our results state that the option to delay diminishes creditor coordination failure whenever the firm is expected to be in distress. --global games,creditor coordination failure,option to delay,social learning

Forbearance lending and soft budget constraints in a model of multiple heterogeneous bank financing

Empirical evidence suggests that banks often engage in refinancing of intrinsically insolvent debtors instead of writing of their non-performing loans. Such forbearance lending may induce soft budget constraints for the debtors, as it diminishes their incentives to thwart default. This paper introduces a model of coordination failure to analyze how a relationship bank affects the incidence of forbearance lending and soft budget constraints by signaling its credit decision to other creditors. We find that the relationship bank's signaling ability enhances its incentives to engage in forbearance lending and infuences the conditions under which debtors face soft budget constraints. --coordination failure,global games,asymmetric information,forbearance lending,soft budget constraints

IMF's assistance: Devil's kiss or guardian angel?

This paper contributes to the debate on the efficacy of IMF's catalytic finance in preventing financial crises. Extending Morris and Shin (2006), we consider that the IMF's intervention policy usually exerts a signaling effect on private creditors and that several interventions in sequence may be necessary to avert an impending crisis. Absent of the IMF's signaling ability, our results state that repeated intervention is required to bail out a country, where by additional assistance may induce moral hazard on the debtor side. Contrarily, if the IMF exerts a strong signaling effect, one single intervention suffices to avoid liquidity crises. --catalytic finance,debtor moral hazard,global games

Signalling effects of a large player in a global game of creditor coordination

In case of multiple creditors a coordination problem can arise when the borrowingfirm runs into financial distress. Even if the project's value at maturity is enoughto pay all creditors in full, some creditors may be tempted to foreclose on theirloans. We develop a model of creditor coordination where a large creditor movesbefore a continuum of small creditors, and analyze the signalling effects of the largecreditor's investment decision on the subsequent behavior of the small creditors. Thesignalling effects crucially depend on the relative size of the large creditor and therelative precision of information. We derive conditions under which pure herdingbehavior is to be expected. --creditor coordination,global games

Creditor coordination with social learning and endogenous timing of credit decisions

In case of multiple source lending even solvent firms may be forced into bankruptcy due to uncoordinated credit withdrawals of their lenders. This paper analyzes whether a debtor firm can thwart such inefficient liquidations by offering creditors the option to delay their foreclosure decision rather than obliging them to simultaneous actions as suggested by Morris and Shin (2004). With this option, lenders can endogenously determine the timing of their credit decisions, trading of the informational benefit from waiting against the associated cost of delay. Our results state that the option to delay diminishes creditor coordination failure whenever the firm is expected to be in distress

Signalling effects of a large player in a global game of creditor coordination

In case of multiple creditors a coordination problem can arise when the borrowing firm runs into financial distress. Even if the project’s value at maturity is enough to pay all creditors in full, some creditors may be tempted to foreclose on their loans. We develop a model of creditor coordination where a large creditor moves before a continuum of small creditors, and analyze the signalling effects of the large creditor’s investment decision on the subsequent behavior of the small creditors. The signalling effects crucially depend on the relative size of the large creditor and the relative precision of information. We derive conditions under which pure herding behavior is to be expected

Forbearance lending and soft budget constraints in a model of multiple heterogeneous bank financing

Empirical evidence suggests that banks often engage in refinancing of intrinsically insolvent debtors instead of writing off their non-performing loans. Such forbearance lending may induce soft budget constraints for the debtors, as it diminishes their incentives to thwart default. This paper introduces a model of coordination failure to analyze how a relationship bank affects the incidence of forbearance lending and soft budget constraints by signaling its credit decision to other creditors. We find that the relationship bank's signaling ability enhances its incentives to engage in forbearance lending and influences the conditions under which debtors face soft budget constraints

IMF's Assistance : Devil's Kiss or Guardian Angel?

This paper contributes to the debate on the efficacy of IMF's catalytic finance in preventing financial crises. Extending Morris and Shin (2006), we consider that the IMF's intervention policy usually exerts a signaling effect on private creditors and that several interventions in sequence may be necessary to avert an impending crisis. Absent of the IMF's signaling ability, our results state that repeated intervention is required to bail out a country, whereby additional assistance may induce moral hazard on the debtor side. Contrarily, if the IMF exerts a strong signaling effect, one single intervention suffices to avoid liquidity crises

Business Intelligence 2015 : Potenziale und Herausforderungen in der deutschsprachigen Schweiz

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Lestaurtinib Inhibits Histone Phosphorylation and Androgen-Dependent Gene Expression in Prostate Cancer Cells

Background: Epigenetics is defined as heritable changes in gene expression that are not based on changes in the DNA sequence. Posttranslational modification of histone proteins is a major mechanism of epigenetic regulation. The kinase PRK1 (protein kinase C related kinase 1, also known as PKN1) phosphorylates histone H3 at threonine 11 and is involved in the regulation of androgen receptor signalling. Thus, it has been identified as a novel drug target but little is known about PRK1 inhibitors and consequences of its inhibition. Methodology/Principal Finding: Using a focused library screening approach, we identified the clinical candidate lestaurtinib (also known as CEP-701) as a new inhibitor of PRK1. Based on a generated 3D model of the PRK1 kinase using the homolog PKC-theta (protein kinase c theta) protein as a template, the key interaction of lestaurtinib with PRK1 was analyzed by means of molecular docking studies. Furthermore, the effects on histone H3 threonine phosphorylation and androgen-dependent gene expression was evaluated in prostate cancer cells. Conclusions/Significance: Lestaurtinib inhibits PRK1 very potently in vitro and in vivo. Applied to cell culture it inhibits histone H3 threonine phosphorylation and androgen-dependent gene expression, a feature that has not been known yet. Thus our findings have implication both for understanding of the clinical activity of lestaurtinib as well as for future PRK