"Life insurance company (LIC) risk exposure increased during the 1980s while capital ratios declined. State guarantee funds that exist to handle policyholder's losses in the event of LIC failure can create incentives for excessive risk taking, just as the federal deposit insurance system did for...

State guaranty funds provide partial protection to life insurance holders in the event of an insolvency, thus creating a moral hazard problem akin to the one associated with deposit insurance in the banking industry. We find that differences across states in the financing of these government...

The product mix changes that have occurred in banking organizations during the 1990s provide a natural experiment for investigating how firms adjust their executive compensation contracts as their mix of businesses changes. Deregulation and new technology have eroded banking organizations’...

Price-concentration studies in banking typically find a significant and negative relationship between consumer deposit rates (i.e., prices) and market concentration. This relationship implies that highly concentrated banking markets are "bad" for depositors. It also provides support for the...

This article analyzes the performance of small business investment companies (SBICs) that are chartered and regulated by the Small Business Administration (SBA). Our principal finding is that poor performance over the 1986-91 period is associated with high usage of funds from the SBA.

This article examines the primary motivations for the massive wave of bank mergers in the U.S. during the 1990s by analyzing the prices paid for target banks. The authors find that these prices reflect both general market and firm-specific characteristics. For example, the lifting of regulatory...

This article examines the investment decisions of small business investment companies (SBICs). The results indicate that potential costs of contracting among SBICs, small firms, and others may have significant effects on how small firms are funded. For instance, projects generating tangible...

This article examines some implications of the failure of three large Japanese banks in 1997 and 1998. The authors examine the response in the equity returns of surviving Japanese banks to the three failure announcements. In addition, they provide evidence on the clients of failed and surviving...