We use a regression discontinuity design to study ex-post discretion in lender's contractual enforcement of restrictive covenant violations. At pre-set thresholds, we find that lenders enforce contractual breaches at an 11% rate, varying between 5% and 18% and peaking when credit conditions are...

Yes. We construct a novel revealed preference measure of financial statement verification based on matching among lenders, borrowers, and auditors. When borrowers use their lenders' preferred auditors, they borrow larger amounts and at lower rates and contracts depend more on accounting...

Lending relationships are prevalent in credit markets and are a potentially important driver of bank value, but little is known about the quantitative significance of this source of intangible capital. To estimate the value of these relationships, we develop a model of the lender’s decision to...

We use fair value adoption as a quasi-natural experiment to examine the effect of hard information on credit supply through a contracting channel. After fair value adoption, usage of financial covenants depending on capital-based fair value treatments significantly declined. Capital-based...

I identify the effects of personal relationships on loan contracting using executive deaths and retirements at other firms as a source of exogenous variation in executive turnover. After plausibly-exogenous turnover, borrowers choose lenders with which their new executive's have personal...

I characterize cosyndication relationships between lead banks and syndicate participants and identify their effects on borrowing capacity during the recent financial crisis. Cosyndication relationships are persistent and reduce bank-bank information asymmetries as measured by retained share....