We investigate whether a bank’s performance during the 1998 crisis, which was viewed at the time as the most dramatic …. Another hypothesis is that a bank’s poor experience in a crisis is tied to aspects of its business model that are persistent …, so that its past performance during one crisis forecasts poor performance during another crisis. We show that banks that …

We investigate why only some banks use regulatory arbitrage. We predict that banks wanting to be riskier than allowed … by capital regulations (constrained banks) use regulatory arbitrage while others do not. We find support for this … hypothesis using trust preferred securities (TPS) issuance, a form of regulatory arbitrage available to almost all U.S. banks …

From 1973 to 2014, the common stock of U.S. banks with loan growth in the top quartile of banks over a three …-year period significantly underperforms the common stock of banks with loan growth in the bottom quartile over the next three … high growth banks also have significantly higher crash risk over the three-year period. This poor performance is explained …