We examine whether bank connections via common mutual fund ownership serve as a contagion channel affecting the systemic risk of the banking system. We first document that the extent of a bank’s connection with other banks via common ownership increases its contribution to systemic risk. We...

The SEC's Disclosure Effectiveness Initiative (December 2013) highlights a difference between accounting regulators and academics in their perceptions of Item 1A risk factor disclosure effectiveness. Because most academic evidence relies on pre-financial crisis data, we compare changes in risk...

We explore how an accounting measure of information asymmetry between lead and participating lenders influences syndication structures by examining whether lead lenders' commercial and industrial (C&I) loan loss provision validity affects the fraction of loans they retain. Consistent with C&I...

We provide large sample evidence that credible hedge commitments reduce the agency costs of debt and that accounting conservatism enhances hedge commitments. We examine 2,338 bank loans entered into by 263 mandatory derivative users that are contractually obligated by interest rate protection...

A number of prior studies use a sample of detected accounting irregularities, e.g., SEC's enforcement actions and class-action lawsuits, to predict the likelihood of accounting violations. The ability of these models to correctly identify potential violations is inhibited by the fact that all...

This research studies one specific financial instrument – Mortgage Servicing Rights (MSRs) and examines whether the fair value of MSRs based on managerial inputs (Level 3) has financial reporting characteristics that differ from the fair value of MSRs based on market inputs (Level 2). Since...

This paper investigates whether the pattern of quarterly earnings changes provides a signal of earnings management. We identify firms for which the sign of (seasonal) earnings changes observed in interim quarters reverses in the fourth quarter. We hypothesize that a firm performing poorly in...

Over 80 percent of securitized loans consolidated back onto banks' balance sheets as a result of FAS 166/167 are revolving consumer loans, primarily credit card loans. In this paper, we examine the impact of FAS 166/167 on the credit card loan securitization. First, we document that the affected...

We consider how corporate culture affects regulatory compliance activities across functions within a firm and investigate the economic consequences of a weak compliance culture. We examine a group of publicly traded pharmaceutical companies over the period of 2003 to 2013 that are required to...