An improved empirical specification of credit card conduct agrees with several prior studies in rejecting perfectly competitive equilibrium, indicates structural disequilibrium in the industry and is consistent with monopolistic competition. Measures of liquidity management costs, omitted from...

Using nationwide U.S. bank-level data from 2003-2007, this paper explores multiple dimensions of the financial performance of small business loans by means of statistical decompositions. I find systematic contrasts across small commercial loans of different sizes, which suggest dynamic changes...

Relaxing the common assumption of purely self-interested preferences in contests, it is shown that altruism (bilateral or unilateral) reduces equilibrium rent-seeking effort. The effects on net payoffs are more complex. Strategic interdependence is possible, but the symmetric equilibrium is pure...

Aggregate concentration may exacerbate systemic risk if the social cost of business failure is a superlinear function of the fraction of industry capacity lost to failure. This result suggests new empirical tests to inform policy debates, as well as supporting an efficiency rationale for...

The study tests whether removing bias can improve out-of-sample forecast accuracy in two series of interest rates. The samples are larger than previously studied in this context, and the test is cleaner since reported interest rates are never revised.

Even after controlling for other observable factors, reciprocal deposits are associated with higher bank risk as measured by the probability of failure and the Zscore. These results are consistent with the moral hazard hypothesis and reject the risk substitution hypothesis.

Standard early warning models to predict bank failures cannot be estimated during periods of few or zero failures, precluding any updating of such models during times of good performance. Here we address this problem using an alternative approach, forecasting the simple leverage ratio...