This paper examines regulators' optimal design for banks' expected credit loss impairment rules. Recognizing expected credit losses imposes market discipline and thus sound risk-taking ex ante (social gain) while it potentially distorts the bank's socially desirable liquidity provision ex...

This paper suggests a solution to what has become known as the "private equity premium puzzle" (Moskowitz and Vissing-Jorgensen (2002)). We interpret occupational choice as a dynamic portfolio choice problem of a life-cycle investor facing a liquidity constraint and imperfect information about...

Prior research hasfound thatpublicly-traded equity was a more viable option over private firms forrisk-averse investors. This finding was termedthe "private equitypremium puzzle," and two parts to this puzzle were determined: acorporate-finance dimension and a portfolio-choice dimension. Here,...