Using hand-collected race information of small business owners that concealed their race in Paycheck Protection Program applications, we find evidence that not disclosing race information in loan applications pays off significantly. Our results show that black-owned businesses that concealed...

Can the risk of losses upon premature liquidation produce bank runs? We show how a unique run equilibrium driven by asset liquidity risk arises even under minimal fundamental risk. To study the role of illiquidity we introduce realistic norms on bank default, such that mandatory stay is...

It is known that sunspots can trigger panic-based bank runs and that the optimal banking contract can tolerate panic-based runs. The existing literature assumes that these sunspots are based on a publicly observed extrinsic randomizing device. In this paper, I extend the analysis of panic-based...

It is known that sunspots can trigger panic-based bank runs and that the optimal banking contract can tolerate panic-based runs. The existing literature assumes that these sunspots are based on a publicly observed extrinsic randomizing device. In this paper, I extend the analysis of panic-based...

The matter of reciprocal loans, whereby a loan is tied to an equivalent (reciprocal) loan in terms of amount and period, raises many questions particularly from the shariah point of view. This necessiates looking into the existing contracts, whether by individuals or corporations, pertaing...

Prior studies show that creditors' simultaneous equity holding mitigates shareholder-creditor conflict. We show that a new type of conflict arises in syndicates with such dual holders, due to the heterogeneity across syndicate members' equity-to-loan positions. We find that loans with higher...

The reciprocal loan simply means that in return for a loan for a specific period, the lender receives an equivalent amount of loan for a similar period of time. Some contemporary scholars believe that reciprocal loans are legitimate, if they are not tied, that is if the lending of one loan does...