This article provides evidence consistent with recent policy proposals calling for a greater role for market forces in promoting a safe and sound financial system. The authors' empirical results indicate a measure of expected default probability distilled from equity prices helps predict the...

A statistical model of regulatory exam ratings provides evidence of conflict between Community Reinvestment Act (CRA) objectives, on one side, and safety and soundness standards, on the other. In his analysis of supervisory goals, Jeff Gunther finds that concentrating bank assets in loans and...

Each quarter, banks file a call report, or Report of Condition and Income, containing hundreds of accounting items pertaining to their financial condition. Because call reports are filed quarterly, whereas banks are typically examined about once every twelve to eighteen months, statistical early...