Six years after the collapse of Lehman Brothers, the question of whether the U.S. financial system has become less risky remains unanswered. On the one side, new regulations including Dodd-Frank and Basel III have made improvements by requiring higher bank capital, and financial institutions...

Why is poor governance pervasive in the mutual fund industry? Researchers, practitioners and regulators have attributed this failing to a lack of director independence from fund management. This paper proposes an alternate explanation: fund governance is contagious. Fund directors act as...

This paper examines how differences in state foreclosure laws influence the incidence of default in the residential mortgage market. In particular, we examine how judicial review requirements, lenders’ recourse rights (deficiency judgments), and state assistance programs for distressed...

Funding risk measures the extent to which a fund can borrow money by posting collateral. Using a novel measure of funding risk based on futures margins, we are able to empirically identify the mechanism by which changes in funding risk affect the likelihood of contagion. An increase in margins...

This paper provides empirical evidence that lumpy investment projects provide firms with the opportunity to adjust leverage at low marginal cost. Consistent with a theoretical model, I find that 1) firms sequence equity before debt during the financing period of their investment projects, and 2)...