We analyze whether tough IRS monitoring generates a positive externality by constraining managers' bad news hoarding activities. Supporting this prediction, we find a negative relation between the threat of an IRS audit and stock price crash risk. Our evidence is consistent with recent theory...

Banks and other financial companies use securitization to redistribute risk and increase liquidity by pooling and selling assets. This paper reviews the typical set-up of a securitization and its potential benefits and risks, including the tendency to concentrate risk in positions retained by...