There is a growing consensus that a prolonged period of low interest rates can exert a negative impact on financial stability through the risk-taking incentives of banks. This study uses comprehensive micro-level datasets from the US banking sector that characterize both new and total loans in...

This paper examines the effect of credit rating disagreements on merger and acquisition (M&A) decisions. We show that acquirers with split ratings prefer to use stock to finance their acquisitions. More importantly, we find that acquirers with split ratings experience lower announcement returns....

Reduced exchange rate volatility and higher and less heterogeneous quality of institutional rules and macroeconomic policies are two of the main (anticipated and concurring) effects expected from a currency union. In this paper we measure the magnitude of these two effects for the Eurozone...

In this study, we investigate the effects of bank safety-oriented culture on loan contracts. We propose a new measure that derives a bank’s safety-oriented culture from its business model. We provide several validation tests to confirm that our measure can represent the safety-oriented culture...

This paper investigates how reputational risk arising from traditional and online media coverage of Corporate Social Irresponsibility (CSI) conducts affects the cost of borrowing. It reports that negative media attention has a significant and positive effect on bank loan costs. The result is...

This paper studies how CEO social networks affect bank risk-taking. Using a sample of 481 publicly traded U.S. banks, we find that bank risk increases with CEOs' social networks. Our results are robust with a bank fixed-effects model and a difference-in-difference approach, as well as with...

Do changes in the IPO regulatory environment affect private firms' exit choices, bargaining abilities, and valuations? Using the JOBS Act as an exogenous shock to the exit decisions among private firms, we observe that their valuations as M&A targets increase by 36% after the Act, negatively...

We examine the effect of firm credit rating downgrades on the pricing and structure of syndicated bank loans following rating downgrades in the firms' countries of domicile. We find that the sovereign ceiling policies used by credit rating agencies create a disproportionally adverse impact on...

The paper investigates whether and how a state's local corruption environment affects firms' financing costs. We find that firms in high-corruption states are associated with significantly higher loan spreads and tighter loan covenants. We use an instrumental variable approach and a...