We test whether measures of potential influence on regulators affect stress test outcomes. The large trading banks – those most plausibly ‘Too big to Fail' – face the toughest tests. In contrast, we find no evidence that either political or regulatory connections affect the tests. Stress...

We test whether measures of potential influence on regulators affect stress test outcomes. The large trading banks - those most plausibly 'Too big to Fail' - face the toughest tests. In contrast, we find no evidence that either political or regulatory connections affect the tests. Stress tests...

Relative performance evaluation (RPE) intensifies competitive pressure by tying executive compensation to the profits of rivals. We show that these contracts make loan syndication harder by reducing banks’ willingness to participate in loans underwritten by banks named in their RPE contracts....

Bank branch density, defined as the number of bank branches to total deposits, has significantly declined over the past decade, fueled by a confluence of branch closings and the almost doubling of deposits between 2016 and 2022. During this period, banks with low branch density benefited from...

We test whether measures of potential influence on regulators affect stress test outcomes. The large trading banks – those most plausibly ‘Too big to Fail’ – face the toughest tests. In contrast, we find no evidence that either political or regulatory connections affect the tests. Stress...