Banks provide risky loans to firms which have superior information regarding the quality of their projects. Due to asymmetric information the banks face the risk of adverse selection. Credit Value-at-Risk (CVaR) regulation counters the problem of low quality, i.e. high risk, loans and therefore...

We document that a firm's culture — specifically, its religiosity — affects its cost of debt. Firms in higher-religiosity counties have higher credit ratings and lower debt costs. The impact of religiosity is stronger for firms with greater information asymmetry and during recessions....

Despite a large literature documenting that the efficacy of monetary policy depends on how inflation expectations are anchored, many monetary policy models assume: (1) the inflation target of monetary policy is constant; and, (2) the inflation target is known by all economic agents. This paper...

This paper contributes to the ongoing debate about the existence and the source of asymmetric information between the Federal Reserve and the public by examining the federal funds rate forecasts. It shows that the Federal Reserve has superior information about its own future policy actions, the...

Despite a large literature documenting that the efficacy of monetary policy depends on how inflation expectations are anchored, many monetary policy models assume: (1) the inflation target of monetary policy is constant; and, (2) the inflation target is known by all economic agents. This paper...

We analyze data from two universities that allowed students to conceal grades from their transcripts during the Covid-19 pandemic. Across both institutions, we observe a significant and substantial gender concealment gap: women are less likely than men to conceal grades that would harm their...

We empirically investigate why wholesale funding is fragile by providing the first study of how individual banks borrow and lend in the euro unsecured and secured interbank market. Consistent with theories in which lenders enforce market discipline by monitoring counterparty credit risk and...

How does uncertainty affect the costs of raising finance in the bond market and via bank loans? Empirically, this paper finds that heightened uncertainty is accompanied by an increase in corporate bond yields and a decrease in bank lending rates. This finding can be explained with a model that...

By using short-term direct finance firms of the highest credit quality exposethemselves to rollover risk in the public debt markets. Firms insure themselvesagainst this risk by securing backup lines of credit from banks that they mayuse should market liquidity dry up. In a first step, this paper...