We analyze the takeover premiums paid for a sample of European bank mergers between 1997 and 2007. We find that acquiring banks value profitable, high-growth and low risk targets. We also find that the strength of bank regulation and supervision as well as deposit insurance regimes in Europe...

Nearly 30% of US banks employ at least one board member who currently serves (or has previously served) the Federal Reserve in a public service role. Public service roles take the form of Federal Reserve directorships or memberships in Federal Reserve advisory councils. We show that connections...

We investigate the relationship between boardroom gender diversity and firm risk. To identify a causal effect of gender on risk, we use a dynamic model that controls for reverse causality and for gender and risk being influenced by unobservable firm factors. We find no evidence that female...

We examine the contractual implications of lender trust in bank loan contracts. We measure a lender's trust using the average trust attitudes in the ancestral country of origin of its CEO. We find that banks with trusting CEOs charge lower loan rates. Furthermore, trusting lenders sanction...

We examine how the information environment influences bank regulatory monitoring. Using the distance between banks and regulatory field offices as a proxy for information asymmetry, we show that an increase in distance reduces the quality of financial reporting. To establish causality, we use a...

We show that compensation and other manager characteristics that attract public scrutiny in the banking industry only describe a small amount of the heterogeneity in the business models of banks. Instead, idiosyncratic manager effects that cannot be explained by observable manager...

We find that when more independent directors rank a directorship high, the firm-specific information content in a firm's stock price increases. Further, independent directors with high reputation incentives serve firms that voluntarily disclose more information and display lower crash risk. We...

Bank payouts divert cash to shareholders, while leaving behind riskier and less liquid assets to repay debt holders in the future. Bank payouts, therefore, constitute a type of risk-shifting that benefits equity holders at the expense of debt holders. In this paper, we provide insights on how...

We investigate the link between the incentive mechanisms embedded in CEO cash bonuses and the riskiness of banks. For a sample of U.S. and European banks, we employ the Merton distance to default model to show that increases in CEO cash bonuses lower the default risk of a bank. However, we find...

Women and ethnic minority groups hold few boardroom positions. In this paper, we adopt a novel empirical strategy to test whether this is caused by a lack of suitable candidates for director positions or, alternatively, by discriminatory barriers that prevent these groups from progressing up the...