Agarwal, Sumit; Morais, Bernardo C.; Seru, Amit; Shue, Kelly - National Bureau of Economic Research - 2024
with discretion in high-stake decisions assessing bank safety and soundness. Using detailed data on the supervisory ratings … of US banks, we find that professional bank examiners exercise significant personal discretion--their decisions deviate … substantially from algorithmic benchmarks and can be predicted by examiner identities, holding bank fundamentals constant. Examiner …