This paper brings together two seemingly unrelated branches of the literature that focuses on different aspects of a bank's interaction with its borrowers: the relative priority of bank debt, and the role of banks as quot;relationship lendersquot;. Specifically, we show that bank seniority plays...

Researchers' attempts to identify the valuation of collateral has been hampered by data limitations. We overcome this challenge by comparing spreads on loans originated by the same bank, to the same firm, at the same origination date, but with different types of collateral. We find that securing...

Using unique nationwide property-level mortgage, flood risk, and flood map data, we analyze whether lenders respond to flood risk that is not captured in FEMA flood maps. We find that lenders are less willing to originate mortgages and charge higher rates for lower LTV loans that face...

We show that insurance companies have almost nonupled their investments in collateralized loan obligations (CLOs) in the post-crisis period, reaching total holdings of $125 billion in 2019. The growth in CLOs' investments has far outpaced that of loans and corporate bonds, and was characterized...

This paper empirically explores the monitoring behavior of banks. We are able to infer bank monitoring activity by observing changes in internally-generated risk metrics for corporate credits. We use these measures of monitoring activity to better understand the bank monitoring motives and...

We argue that the defining feature of large and complex banks that makes their failures messy is their reliance on runnable financial liabilities that confer liquidity or money-like services that may be impaired or destroyed in bankruptcy. To make large bank failures more orderly, we advocate...

We show that insurance companies have almost nonupled their investments in collateralized loan obligations (CLOs) in the post-crisis period, reaching total holdings of $125 billion in 2019. The growth in CLOs’ investments has far outpaced that of loans and corporate bonds, and was...

We show that insurance companies have almost nonupled their investments in collateralized loanobligations (CLOs) in the post-crisis period, reaching total holdings of $125B in 2019. The growthin CLOs’ investments has far outpaced that of loans and corporate bonds, and was characterized by a...

Firms with debt overhang, measured as total borrowing to cash-flow, experience 2% slower asset growth during ordinary times and up to 3% slower growth during a crisis, compared to similar firms without debt overhang. These patterns extend to a firm's growth in employment and capital...

We show that insurance companies have almost nonupled their investments in collateralized loan obligations (CLOs) in the post-crisis period, reaching total holdings of $125 billion in 2019. The growth in CLOs' investments has far outpaced that of loans and corporate bonds, and was characterized...