This paper investigates how covenants, intrinsic to Collateralized Loan Obligation (CLO) indentures, may amplify idiosyncratic shocks, imposing negative externalities on unrelated firms in CLO portfolios. Following a negative shock to the oil & gas industry, CLOs with exposure to oil and gas...

Many governments regulate household leverage at a national level, even when credit and housing market conditions vary substantially across locations. We explore the efficacy of loan-to-value (LTV) limits targeted towards specific neighborhoods as a macroprudential policy designed to curb local...

We study passive funds' conflicts of interest by examining their securities lending decisions. We show that passive funds' lending varies with the costs of lending for their families. Passive funds are less likely to lend a security if (i) active funds in their families have a sizable stake in...

This paper investigates why originate-to-distribute commercial lenders make markets for the loans that they sell on the secondary market. Using loan-level data, I find that origination lenders with extensive borrower relationships and higher reputations are more likely to serve as market makers....

We analyze mortgage lenders’ behavior with respect to shale gas risk during the period of the U.S. shale gas boom, which coincided with fluctuations in the U.S. housing market and increased scrutiny in the lending industry. Shale gas operations have the potential to place affected houses into...