Procyclical Behavior of Institutional Investors During the Recent Financial Crisis

Procyclical Behavior of Institutional Investors During the Recent Financial Crisis
Author :
Publisher : International Monetary Fund
Total Pages : 53
Release :
ISBN-10 : 9781484375556
ISBN-13 : 1484375556
Rating : 4/5 (556 Downloads)

Book Synopsis Procyclical Behavior of Institutional Investors During the Recent Financial Crisis by : Mr.Michael G Papaioannou

Download or read book Procyclical Behavior of Institutional Investors During the Recent Financial Crisis written by Mr.Michael G Papaioannou and published by International Monetary Fund. This book was released on 2013-09-11 with total page 53 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper (i) provides evidence on the procyclical investment behavior of major institutional investors during the global financial crisis; (ii) identifies the main factors that could account for such behavior; (iii) discusses the implications of procyclical behavior; and (iv) proposes a framework for sound investment practices for long-term investors. Such procyclical investment behavior is understandable and may be considered rational from an individual institution’s perspective. However, our main conclusion is that behaving in a manner consistent with longterm investing would lead to better long-term, risk-adjusted returns and, importantly, could lessen the potential adverse effects of the procyclical investment behavior of institutional investors on global financial stability.


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