Diversification opportunities for banks may be greater today because of the lessening of geographic restrictions. In addition, regional economies have undergone vast transformations, with relatively volatile industries often assuming a diminished role. To assess whether these changes have...

A statistical model of regulatory exam ratings provides evidence of conflict between Community Reinvestment Act (CRA) objectives, on one side, and safety and soundness standards, on the other. In his analysis of supervisory goals, Jeff Gunther finds that concentrating bank assets in loans and...

Each quarter, banks file a call report, or Report of Condition and Income, containing hundreds of accounting items pertaining to their financial condition. This article analyzes call report revisions to assess the extent to which regulatory exams promote accurate data. The findings indicate...

This article provides evidence consistent with recent policy proposals calling for a greater role for market forces in promoting a safe and sound financial system. The authors' empirical results indicate a measure of expected default probability distilled from equity prices helps predict the...

A growing number of high-profile companies have had to restate their earnings at substantially lower levels to correct the prior use of "aggressive" and even fraudulent accounting practices. Because the companies’ auditors approved the original reports, policymakers have questioned the...