We ask whether regulatory forbearance on bank loans contributes to deterioration in the governance of borrowing firms. More exposed firms experience a reduction in board independence and external monitoring, an increase in management compensation including transactions with connected entities,...

Although the impact of social ties on credit markets has been studied, the possibility of contagion through social ties remains unexplored. Examining the Indian caste system and the group loan structure, we find that social ties could turn shocks into a contagion within credit markets: a drought...

Although court judgments on economic issues are frequent, their impact remains understudied. Unlike laws, studied extensively by law and finance literature, they are not publicly debated, not passed by legislators, and do not always factor in economic implications. Studying an unexpected verdict...

At the onset of the financial crisis, the Indian regulator allowed banks to restructure loans without downgrading and providing for them. The special treatment to the infrastructure sector, plausibly driven by the political economy, and heterogeneity in bank exposure provide identification. Even...