We examine whether supply-side capacity constraints contribute to the well documented “failure to refinance” among certain borrowers who would benefit financially from doing so. We find that, conditional on the potential financial benefits of refinancing, “marginal” borrowers (those with...

We study how capital controls and domestic macroprudential policy tame credit supply booms, respectively targeting foreign and domestic bank debt. For identification, we exploit the simultaneous introduction of capital controls on foreign exchange (FX) debt inflows and an increase of reserve...

Regulation needs effective supervision; but regulated entities may deviate with unobserved actions. For identification, we analyze banks, exploiting the European Central Bank’s asset-quality-review (AQR) and supervisory security and credit registers. After the announcement of the AQR, reviewed...

We study bank specialization in lending in the U.S. corporate loan market. We document that banks specialize in lending to specific industries. Specialization is persistent over time and common across industries. Using detailed information on syndicated loans, we show that the typical loan...

Approximately 34% of local municipal bond issues were issued without ratings during 1998 to 2017. We study the circumstances that affect the decision to obtain a rating and whether unrated bonds, controlling for observable risk factors, are more expensive to issue than rated bonds. Results show...

Although a body of theoretical literature asserts that a key advantage of banks is their ability to monitor borrowers, we believe this is the first paper to empirically examine determinants of bank monitoring within non-syndicated loans. Using a proprietary transaction-level database consisting...

A broad awareness exists about the potential procyclical effects of FDIC deposit insurance premiums. Despite the importance of the topic, however, empirical study on the link between procyclical insurance premiums and bank performance has been limited due to identification challenges. In this...

We estimate the effect of job loss on households’ bank account ownership using a novel assembly of data: FDIC-sponsored biennial supplements to the Current Population Survey (CPS), linked to respondents’ work history in surrounding months constructed from the basic monthly CPS. We leverage...

Bond markets can plummet or rally on the back of sentiment-driven reactions which are unrelated to fundamentals. Therefore, changes in bond prices can not only be interpreted as reflecting risk but also mispricing of long-term assets. These perceived risks can often feed back into the economy by...

We examine how banks’ technological investments affected their ability to maintain or expand their business in the unprecedented economic recession associated with the COVID-19 pandemic. A one standard deviation increase in our financial technology measure, which describes a bank’s coverage...