Recent theory papers by Diamond and Rajan (2000, 2001) and others suggest that banks with higher capital ratios may create less liquidity because capital diminishes financial fragility and/or “crowds out” deposits. Other contributions suggest the opposite outcome: banks with higher capital...

Recent theory papers by Diamond and Rajan (2000, 2001) and others suggest that banks with higher capital ratios may create less liquidity because capital diminishes financial fragility and/or “crowds out” deposits. Other contributions suggest the opposite outcome: banks with higher capital...

This paper empirically examines how CEO optimism affects earnings smoothing and earnings surprises. The main finding is that optimistic managers smooth earnings more than rational managers and are associated with smaller (in absolute value) earnings surprises. A possible theoretical explanation...

We study the dynamics of market entry following mergers and acquisitions (M&As) and the behavior of recent entrants in supplying output that might be withdrawn by the consolidating firms. The data, drawn from the banking industry, suggest that M&As are associated with subsequent increases in the...