We develop a novel technique to decompose banks' ratio of nonperforming loans to total loans into two components: first, a minimum ratio that represents best-practice lending given the volume and composition of a bank's loans, the average contractual interest rate charged on these loans, and...

We develop a novel technique to decompose banks' ratio of nonperforming loans to total loans into three components: first, a minimum ratio that represents best-practice lending given the volume and composition of a bank's loans, the average contractual interest rate charged on these loans, and...

Using 2013 and 2016 data, we compare the performance of unsecured consumer loans made by U.S. bank holding companies to that of the fintech lender, LendingClub. We focus on the volume of nonperforming unsecured consumer loans and apply a novel technique developed by Hughes and Moon (2017) that...

This study investigates possible reasons for the gender difference in sickness absence. We estimate both short- and long-term effects of parenthood in a within-couple analysis based on the timing of parenthood. We find that after entering parenthood, women increase their sickness absence by...

Insured depositors have no reason to care how their banks perform or how safe they are. Only uninsured depositors have that incentive. This paper offers a plan to replace some insured deposits with uninsured deposits. The plan: the FDIC would guarantee loan contracts if the loan takers deposited...

We examine the moral hazard effects of bank recapitalizations by assessing the impact of the U.S. TARP program on market discipline exerted by subordinated debt-holders using a sample of 123 bank holding companies over the period 2004-2013. Predicted distress risk has a consistently positive and...

In this paper we show that reputation formation in endogenously formed relationships is a decisive determinant for the existence and performance of credit markets. In theabsence of any third party enforcement of debt repayment the contracting parties succeed in establishing stable bilateral...

This paper examines two major forces that may soon increase competition in the U.S. secondary conforming mortgage market: 1) the expansion of Federal Home Loan Bank mortgage purchase programs, and 2) the adoption of revised risk-based capital requirements for large U.S. banks (Basel II).(...)

We model the financial cooperative as an optimal institution sharing liquidity risks among agents with social preference and group identity. Stronger social concerns imply objectively better (worse) conditions for borrowers (depositors). Testing the model, we find that, indeed, deposit and loan...

Business angels dominate early-stage investment in firms, but research on their investment effects is scarce and is limited by sample selection. Therefore, we propose an algorithm for identifying business angel investments from total population data. We apply the algorithm to study business...