In this paper we examine the ex-ante importance of accounting changes in debt contracts by examining how the exclusion of the flexibility to make voluntary and mandatory accounting changes from the calculation of covenant compliance affects the interest rate charged on the loan. After...

This paper reports on an examination of the effects of dfferential state taxation of U.S. Government obligations (hereinafter, USOs) on how banks structure their investment and financing portfolios. Twenty-seven states tax banks on their USOs holdings or the income from them and twenty-three...

In this paper we examine how the realizations of securities gains and losses by banks owned by an interstate multibank holding company are related to the tax, earnings, and capital management objectives of the consolidated group and of the individual subsidiaries. We find that while subsidiary...

This paper documents evidence on the efficacy of maturity gap disclosures and interest rate risk policy disclosures of commercial bank holding companies in indicating their interest rate risk exposures. Using data from the Federal Reserve Y-9 reports over 1991-1996, we find a significant...

This study provides evidence on the Interest Rate Risk (IRR) management activities of commercial banks including their use of derivatives. We find that (i) banks primarily focus on managing interest rate sensitivity of net income rather than the interest rate sensitivity of stock returns, (ii)...