The present study is centered primarily on determining whether the German banking system is to be characterized by procyclical behavior from 2000 to 2011 and to what extent specific sectors of the German banking system showed significant balance sheet operations to increase their leverage within...

According to Article 210 of the Commercial Law, a bank (or a firm) with an intention of repurchasing shares has to make two decisions at the board of directors. The one is the decision about whether a bank has a tendency of repurchasing shares in the future or not and then about how many shares...

I study the impact of Lehman Brothers' bankruptcy and resultant inability to honor its obligations as a lender under committed credit lines. Firms that lost access to a credit line committed by Lehman Brothers experienced abnormal stock returns of -3%, on average, on the day of and day after...

The experience of the 2007-09 financial crisis has prompted much consideration of the link between the structure of compensation in financial firms and excessive risk taking by their employees. A key concern has been that compensation design rewards managers for pursuing risky strategies but...

We document that shareholders of high-yield firms are less sensitive to credit rating downgrades the higher the proportion of bank financing in the firm. This positive effect is linked to firm behavior. In the year after the downgrade, high-yield firms with large bank debt ratios i) need to...

We empirically examine three channels in the relation between banks' CDS trading and loan sales. The substitute channel predicts a negative relation between CDS hedging and loan sales, and the complementary channel predicts a positive relation. The credit-enhancement channel predicts a positive...

We examine whether and how measures of market and credit risk modeling identified from banks' financial reports enhance the returns-relevance of their estimated annual unrealized fair value gains and losses for financial instruments. To capture differences in market liquidity and fair valuation...

This paper investigates the determinants of new equity offerings and estimates its costs in sample selection model. The main finding is that a weak capital base is one of the key driving forces of the new issuance around the recently strengthened Basel regulations, although banks were not...

This paper investigates the determinants of new equity offerings and estimates its costs in sample selection model. The main finding is that a weak capital base is one of the key driving forces of the new issuance around the recently strengthened Basel regulations, although banks were not...

This paper studies bank new equity offerings in response to recently strengthened Basel capital regulation. Our empirical analyses investigate the determinants of issuing new equity and estimate its costs in sample selection model. The key finding is that weak capital base is one of the key...