particular, we show that the stock market applies far greater discounts to a bank’s real estate loans and mortgage …-backed securities than are implicit in the book values of these assets, especially following the onset of the U.S. mortgage crisis. This … impairment. We also find that bank share prices, especially for banks with large exposures to mortgage-backed securities, react …

This paper links the current sub-prime mortgage crisis to a decline in lending standards associated with the rapid … declines in lending standards by incumbent banks. Finally, lending standards declined more in areas with higher mortgage …