We investigate whether firms “lean against the wind,” i.e., manage earnings upward to offset aggregate (market wide) undervaluation, by examining how firm-specific measures of earnings management correlate with aggregate market conditions. Leaning against the wind has been proposed by prior...

We study the effects of monetary policy in an economy with distortions. Between 2006 and 2019, China’s central bank frequently adjusted required reserve ratios (RR) and interest rates (IR) to implement monetary policy. We examine how stock prices react to these adjustments and distinguish...

We contrast how monetary policy affects intangible relative to tangible investment. We document that the stock prices of firms with more intangible assets react less to monetary policy shocks, as identified from Fed Funds futures movements around FOMC announcements. Consistent with the stock...

This article examines the consequences of accounting policy choices for individual banks' downside tail risk, for the codependence of such risk among banks, and for regulatory forbearance, or the decision by a regulator not to intervene. The author synthesizes recent research that provides...

An important unresolved issue is the extent to which bank transparency promotes or undermines bank stability. Conflicting views on transparency create a demand for empirical research that can provide insights into the nature of transparency and when, where and how it positively or negatively...

The paper considers conceptual, methodical and practical aspects of the target financial analysis at the micro level, i.e., the company level, as a new instrument of anticrisis financial management for a company to overcome its financial difficulties and enhance its financial position within a...

We study whether management guidance affects how stock prices respond to monetary policy shocks in the Eurozone. Using intraday data to measure European Central Bank’s interest rate surprises, we show that issuing earnings guidance prior to the announcement attenuates the stock reaction for...

We offer evidence of a new stylized feature of corporate financing decisions: the tendency of managers to rely more on debt financing when earnings prospects are poor. We term this 'leaning against the wind' and consider three possible explanations: market timing, precautionary financing, and...

We develop a credit-risk model to study how information acquisition affects the liquidity in a secondary bond market. In our model, the creditors of a firm can acquire costly information about the firm and exploit the information advantage by selling their bonds to uninformed buyers. When a...