We study whether and how corporate loan securitization through collateralized loan obligations (CLOs) has changed the nature of bank lending relationship. We use a large dataset of CLO collaterals to identify securitized loans and the relationship lenders. We show that even if a relationship...

Using the Troubled Asset Relief Program (TARP) as a laboratory, this paper examines the impacts of bank bailouts on bank-dependent clients. We find that large TARP recipient banks reduce credit supply to dependent borrowers in the post-TARP period. Such effect is more pronounced when recipient...

We examine how securitization markets affect the role of banks as monitors in corporate lending. We find that banks active in securitization impose looser covenants on borrowers at origination. After origination, these borrowers take on substantially more risk than borrowers of...

Using a regression discontinuity design, this study shows that strengthened bank control rights triggered by loan covenant violations lead to an increase in cash tax savings and a reduction in tax risk. This effect is driven largely by firms with more severe shareholder–debtholder conflicts....

This paper examines whether and how banks adapt to long-run climate change. We show that banks increase their loan loss provisions by 7% in response to a 1°F increase in three-year weighted average abnormal temperature. Such an effect is more pronounced when banks have greater pre-existing...

In this study, we utilize the setting of bank M&As to examine banks’ role in tax planning intermediation through helping their clients establish offshore tax haven operations. After a bank M&A, the clients of the target bank “involuntarily” switch to a significantly larger relationship...

Using the SEC’s 2004 decision to begin publicly disclosing its comment letters, we study the consequences of increased regulatory transparency on the banking industry. Because the SEC only issues comment letters to public banks, we exploit a difference-in-differences design to examine the...