We study the efficacy of forbearance using a real options approach. Our model endogenizes moral hazard embedded in credit risk undertaken by the bank. The bank's interest rate risk is modeled as duration mismatch. Other modeling improvements over previous studies include such features as...

A large number of mutual savings and loan associations (MSLs) converted their charters into stock ownership between the mid-1980s to mid-1990s. Because these conversions tended to generate windfall profits for insiders and investors, new conversion guidelines and regulations were proposed by the...