In this study, we analyze the trading behavior of banks with lending relationships. We combine detailed German data on banks' proprietary trading and market making with lending information from the credit register and then examine how banks trade stocks of their borrowers around important...

An important question in banking is how strict supervision affects bank lending and in turn local business activity. Supervisors forcing banks to recognize losses could choke off lending and amplify local economic woes. But stricter supervision could also change how banks assess and manage...

We investigate the impact of reporting regulation on corporate innovation. Exploiting thresholds in Europe's regulation and a major enforcement reform in Germany, we find that forcing firms to publicly disclose their financial statements discourages innovative activities. Our evidence suggests...