This study investigates the effect of similarity in risk attitudes between lenders and borrowers on loan contracting. We find that when banks and lenders have similar risk attitudes they are more likely to sign loan contracts. Moreover, such contracts are associated with lower spreads, longer...

Over a period that includes the 1998 Russian crisis and 2007-2009 financial crisis, banks with overconfident chief executive officers (CEOs) were more likely to weaken lending standards and increase leverage than other banks in advance of a crisis, making them more vulnerable to the shock of the...

This paper investigates how bank CEO risk-taking incentives influence bank lending decisions. Consistent with the existing CEO incentive literature, we find that CEOs with higher risk-taking incentives (vega) tend to relax their lending standards in bank loan contracts to pursue higher...

We empirically investigate the role of country governance in the privatization of 113 government-owned banks from 1996 to 2007 across 39 countries. First, privatized banks tend to outperform non-privatized banks after the privatization, which is called the privatization effect. Second, we find...