We explore how an accounting measure of information asymmetry between lead and participating lenders influences syndication structures by examining whether lead lenders' commercial and industrial (C&I) loan loss provision validity affects the fraction of loans they retain. Consistent with C&I...

To encourage banks to accommodate distressed borrowers during the COVID-19 pandemic, regulators redacted loan modification activity from each bank’s public regulatory filings so that banks could modify loans free from capital market scrutiny. Congress also superseded U.S. GAAP by allowing...

Based on a linear provision/charge-off association and V-shaped scatter-plots of these variables against nonperforming loan changes, Basu et al. (2020) argue that nonperforming loan changes mis-measure credit quality and linear provision models are mis-specified. They conclude that residual...

We examine how regulatory restrictions on capital market activity affect the compensation contracting environment within firms. This study aims to expand our understanding of how financial market development affects firm risk-taking via management compensation designs. Specifically, taking...

Banks with low regulatory capital facing external-financing frictions may reduce lending to avoid a capital shortage. The capital crunch theory predicts that banks' lending is particularly sensitive to their capital ratios during recessions. Procyclicality in bank lending may be magnified when...