Recent cascade of bank failures in the U.S. draws attention to investor behavior. In this study, we investigate herding behavior of investors in U.S. bank stocks during the pandemic quantitative easing (QE) and post-pandemic quantitative tightening (QT) periods. We find evidence on...

We investigate the effects of bank powers – regulatory permissions to engage in nontraditional activities – on liquidity creation, the most comprehensive measure of bank output. We find support for the empirical dominance of the synergies view over the scope diseconomies view. Additional...

This study examines the role of distracted institutional investors in banks. We find that as institutional investors become distracted, banks create more liquidity, record significantly better loan portfolio performance, and higher bank value. In addition, large banks have lower insolvency risk...

The U.S. bank stress tests were introduced to improve the risk posture and management practices of large and complex banking institutions. This study investigates whether stress-tested banks in the U.S. converge to each other in their levels and determinants of profitability, as well as...