This paper investigates the incentives for banks to bias their internally generated risk estimates. We are able to … by low-capital banks to improve regulatory ratios. At the portfolio level, the difference in borrower probability of … credits. In addition, we find that low-capital banks' risk estimates have less explanatory power than those of high …

lending. We find that the guidance primarily impacted large, closely supervised banks, but only after supervisors issued … more lax lending policies than banks, we unveil important evidence that nonbanks increased bank borrowing following the … issuance of guidance, possibly to finance their growing leveraged lending. The guidance was effective at reducing banks …

Historically, nonfinancial corporations relied on performance targets linked to their EPS. Up until the 1970s, banks … explaining banks' market values. In this paper we present a model of a bank with fixed-rate deposit insurance that faces …

This paper investigates the incentives for banks to bias their internally generated risk estimates. We are able to … by low-capital banks to improve regulatory ratios. At the portfolio level, the difference in borrower probability of … credits. In addition, we find that low-capital banks' risk estimates have less explanatory power than those of high …

Historically, nonfinancial corporations relied on performance targets linked to their EPS. Up until the 1970s, banks … explaining banks' market values. In this paper we present a model of a bank with fixed-rate deposit insurance that faces …

lending. We find that the guidance primarily impacted large, closely supervised banks, but only after supervisors issued … more lax lending policies than banks, we unveil important evidence that nonbanks increased bank borrowing following the … issuance of guidance, possibly to finance their growing leveraged lending. The guidance was effective at reducing banks …

distressed loans. Our findings reveal that CLO managers affiliated with banks start to sell off their positions in loans arranged … arranged by unaffiliated banks. Besides helping us understand CLO managers' trading activities, our findings also highlight a … potential limit to banks' ability to originate loans and distribute them via their affiliated CLOs …

The massive losses that banks incurred with the meltdown of the subprime mortgage market have raised concerns about … spreads during the subprime crisis.Importantly, the increase in loan spreads was higher for firms that borrowed from banks … the crisis when they borrowed from banks that incurred larger losses, lend support to the concerns about bank lending …