Sparked by rising defaults on subprime mortgages, the financial turmoil of 2007 and 2008 threatened the stability of the worldwide financial system and led to unprecedented interventions in financial markets by central banks and other governmental institutions. This essay describes and explains...

We extend our prior work on how both supply (including the emergence of OTC equity derivatives and growth in share lending) and demand (including the growth of hedge funds) factors now facilitate the large-scale, low-cost decoupling of shareholder voting rights from shareholder economic...

This paper contrasts the economic incentives implicit in the Keynes Minsky approach to inherent financial market instability with the incentives behind the traditional equilibrium approach leading to market stability to provide a framework for analyzing the stability induced by the recent...

We address a number of comparative issues relating to the performance of failure prediction models for small, private firms. We use two models provided by vendors, a model developed by the National Bank of Belgium, and the Altman Z-score model to investigate model power, the extent of...

This comment letter was submitted to the U.S. Treasury Department in connection with that Department's review of proposals for changes in the regulatory structure for financial institutions. The comment letter presents the following policy recommendations: (1) the thrift charter should be...

I empirically examine whether firms engage in one-stop shopping for loans and equity underwriting, following the relaxation of regulatory restrictions. I find that large rated firms often obtain both these services from the same financial intermediary. Such one-stop shopping remains rare among...

This paper demonstrates that previous finding of commercial banks being superior to investment banks as bond underwriters is an artifact of misusing the treatment model. Although the treatment model considers endogenous selection, it does not permit selection based on the observable firm...

This paper examines underwriter reputation loss by using a sample of investment banks that have served corporate clients prior to the discovery of clients' alleged financial reporting fraud. The results indicate that underwriters lose reputation upon the filing of lawsuits against their clients....

This paper studies how competition lowers underwriters' incentive to screen clients in the bond market during 1996-2000. Responding to the intensified competition due to commercial bank entry, underwriters appeared to co-lead (work in groups) in lower quality deals but maintained their...