This paper explores some consequences for economic efficiency of creative accounting practices by merging companies. It assumes semi-strong information efficiency in the markets for capital and for corporate control; and/or the use of executive contracts relating pay to accounting profit. Ahead...

Our analytical description of how banks' responses to asset price changes can result in procyclical leverage reveals that for banks with a binding regulatory leverage constraint, absent differences in regulatory risk weights across assets, procyclical leverage does not occur. For banks without a...