In this paper I develop a model of a debt and equity financed representative firm whose production/investment decisions and financing decisions characterize business cycles. The conflict of interest problem between the differentially risk averse debt and equity investors is resolved with an...

This paper provides a 5 year review of the Consumer Financial Protection Bureau which is part (title X) of the Dodd-Frank Wall Street Reform and Consumer Protection Act. The CFPB is one of the most controversial parts of the Dodd-Frank Act. It has been argued (mostly by the banking industry)...

What factors cause banks to lend to the private sector in a bank-based financial system like the ones in place in Europe? In this paper we compare a traditional demand oriented model to a non-traditional capital budgeting model of bank lending based on movements in the equity cost of capital for...

This paper presents a model of the portfolio and financing adjustments of U.S. banks over the business cycle. At the core of the model is a moral hazard problem between depositors/bank regulators and stockholders. The solution to this problem takes the form of shared management of the bank....

In this paper I compare a capital budgeting model of bank lending based on stock valuations to a supply/demand model based on an interest rate channel for France and Germany using non-nested hypothesis tests and omitted variables tests. For France the results of these two statistical tests...

This paper presents a theory of corporate finance from the perspective of bondholders. Towards this end an equilibrium model of a debt and equity financed firm is developed that motivates the need for an upfront bond contract that solves an agency problem between bondholders and stockholders....

This paper describes an equilibrium macro finance model where contracts are the mechanism by which differentially risk averse bondholders and stockholders resolve a conflict of interest problem and confront the risks associated with future operating decisions and financing decisions of a...

The financial and economic crisis of 2007-2011 in the U.S. and Europe raises a number of fundamental questions on the role of banks in the financial system. The response so far has resulted in a reregulation of banks and certain systematically important non-bank financial institutions. One...

This paper formulates and tests a model that describes the asset and financing adjustments of U.S. non-financial enterprises over the twentieth century. Asset adjustments change the expected income and operating risk of firms while financing adjustments change the financial risk. To protect debt...

This article is a review of a 531 page book that in turn is a review and evaluation of the 2,319 page Dodd-Frank Wall Street Reform and Consumer Protection Act passed by Congress on July 16, 2010. The overriding theme of the book is to pose two approaches to attaining financial stability in the...