Consider a competitive bank whose illiquid asset portfolio is funded by short-term debt that has to be refinanced before the asset matures. We show that in this setting maximal transparency is not socially optimal, and that the existence of social externalities of bank failures further lowers...

Volcker Rule suggests a break-up of 'too big to fail' financial institutions to prevent future costly bailouts and great recessions. We need to (i) regulate derivative trading to make it more transparent, (ii) fix conflicts of interest in ratings agencies, (iii) ban shadow-banking and...

White-collar criminology scholarship shows that “accounting control frauds” (frauds led by the CEO) use accounting fraud to deceive (or suborn) sophisticated financial market participants. Large control frauds cause greater financial losses than all other forms of property crimes combined....

Without regulation, securitization allowed mortgage industry actors to gain fees and to put off risks. During the housing boom, the ability to pass off risk allowed lenders and securitizers to compete for market share by lowering their lending standards, which activated more borrowing. Lenders...

Congress must be applauded for the corporate governance reforms enacted in Sarbanes-Oxley Act of 2002, although some areas involving Banks and Brokerage houses need further reform. This paper argues that we need to cancel the spirit of the 1999 repeal of the 1933 Glass-Steagall Act by forcing...

Many of us in the anticorruption community have been calling for better enforcement of quot;Conflict of Interestquot; provisions of existing laws, ban on shell corporations, especially those in money laundering havens. It is clear that if these had been followed, Enron fraud might have been...

This paper documents that bank penetration in underwriting market is positively associated with the benefit of commercial bank underwriting, the presence of relationships with clients and firms with middle credit ratings, but negatively associated with issue size and issue maturity. Commercial...

We study the effects of PPP loans on business competition. Hit hard by the Covid-19 pandemic, the U.S. airport hotel industry offers a useful empirical setting in which we observe daily prices (room rates), market shares (occupancy), and demand (airport traffic). Older and less profitable hotels...

A model of loan rate competition with liquidity provision by banks is used to study bank mergers. Both loan rate competition and liquidity needs are seen to be "localised" phenomena. This allows for tracing down the effects of particular types of bank mergers. As such, we contrast the effects of...

We model the impact of bank mergers on loan competition, reserve holdings and aggregate liquidity. A merger creates an internal money market that affects reserve holdings and induces financial cost advantages, but also withdraws liquidity from the interbank market. Loan market competition...