We develop empirical models for the detection of insider abuse and fraud occurring at U.S. commercial banks with the goals of identifying leading indicators of fraud and fraud prediction. We use information from enforcement actions taken by bank supervisors to remove offending bank employees and...

This paper investigates the role of textual information in a U.S. bank merger prediction task. Our intuition behind this approach is that text could reduce bank opacity and allow us to understand better the strategic options of banking firms. We retrieve textual information from bank annual...

This study investigates how well weekly Google search volumes track and predict bank failures in the United States between 2007 and 2012, contributing to the expanding literature that exploits internet data for the prediction of events. Different duration models with time-varying covariates are...

Using a large panel of US banks over the period 2008-2013, this paper proposes an early warning framework to identify bank heading to bankruptcy. We conduct a comparative analysis based on both Canonical Discriminant Analysis and Logit models to examine and to determine the most accurate one....

In this paper, we compare the performance of two non-parametric methods of classification, Regression Trees (CART) and the newly Multivariate Adaptive Regression Splines (MARS) models, in forecasting bankruptcy. Models are implemented on a large universe of US banks over a complete market cycle...

When race is not directly observed, regulators and analysts commonly predict it using algorithms based on last name and address. In small business lending--where regulators assess fair lending law compliance using the Bayesian Improved Surname Geocoding (BISG) algorithm--we document large...

Proxies for race are commonly used in settings where race cannot be observed directly. In the context of small business lending, we examine the standard race prediction algorithm (BISG), which regulators use to assess compliance with fair lending laws. The algorithm relies on an individual’s...

This paper assesses the relationship between the macroeconomic system and the banking sector by estimating two separate non-linear Vector Autoregressive models (VAR) for the US and Switzerland. The model specification includes the output gap, the interest rate, the in ation rate and a banking...