Fintechs are believed to help expand credit access to underserved consumers without taking on additional risk. We compare the performance efficiency of LendingClub's unsecured personal loans with similar loans originated by banks. Using stochastic frontier estimation, we decompose the observed...

Over the past two decades, a variety of deregulatory measures have increased competition in the U.S. commercial banking industry. While increased competitive rivalry creates incentives for banks to operate more efficiently, it also creates incentives for banks to take additional risk,...

We compare the performance of unsecured personal installment loans made by traditional bank lenders with that of LendingClub, using a stochastic frontier estimation technique to decompose the observed nonperforming loans into three components. The first is the best-practice minimum ratio that a...

Using 2013 and 2016 data, we compare the performance of unsecured consumer loans made by U.S. bank holding companies to that of the fintech lender, LendingClub. We focus on the volume of nonperforming unsecured consumer loans and apply a novel technique developed by Hughes and Moon (2017) that...

We develop a novel technique to decompose banks' ratio of nonperforming loans to total loans into two components: first, a minimum ratio that represents best-practice lending given the volume and composition of a bank's loans, the average contractual interest rate charged on these loans, and...

We develop a novel technique to decompose banks' ratio of nonperforming loans to total loans into three components: first, a minimum ratio that represents best-practice lending given the volume and composition of a bank's loans, the average contractual interest rate charged on these loans, and...

An empirical model of managers’ demand for agency goods is derived and estimated using the Almost Ideal Demand System of Deaton and Muellbauer (AER 1980). As in Jensen and Meckling (JFE 1976), we derive managers’ demand for agency goods by maximizing a managerial utility function where...