The paper demonstrates that a real options structural model of borrower-creditor debt re-negotiations can help explain the cross-sectional variability of losses on defaulted debt securities. The explanatory power of this approach can be improved even further via a system of equations that...

Bank consolidation is a global phenomenon. It may enhance the value of firms in the industry if, for example, it is driven by scale and scope economies, but skeptics often accuse bankers of sacrificing value to build empires. Using data on bank holding companies in the U.S., we find strong...

We hypothesize that financial disintermediation during and after the Great Depression arose from the slow liquidation of failed-bank deposits. Empirical results from incorporating the stock of failed national bank deposits for the period 1921-40 in vector autoregression (VAR) models suggest that...