We investigate the effect of executives and directors with prior banking crisis experience on bank outcomes around the global financial crisis (GFC). Executives and directors with previous experience leading banks through a bank crisis may have been uniquely able to understand the risks,...

We study the effects of the Dodd-Frank Act (“Dodd-Frank”) on determinants of credit ratings. We predict that the increase in regulatory oversight and litigation risk prompted by Dodd-Frank, as well as requirements for improved disclosures and governance, motivated credit rating agencies...

Prior studies find that (i) investors over-weight (or over-estimate the persistence of) past accruals and under-weight past cash flows, and (ii) analysts over-weight past accruals. We study financial analysts' and investors' assessments of the persistence of accruals and cash flows after...

This study provides evidence regarding the effects of online trading on stock market reactions to quarterly earnings announcements. We test for differences in stock price and volume reactions to quarterly earnings announcements between a period with a significant amount of online trading...

This study provides evidence on the role of accounting conservatism in mitigating bondholder/shareholder conflicts over dividend policy. In particular, we document that firms that face more severe conflicts over dividend policy tend to use more conservative accounting. Furthermore, we also...

Easterwood and Nutt (1999) show that analysts under-react to bad news in past earnings changes (or forecast errors) but over-react to good news in past earnings (or forecast errors) consistent with analysts exhibiting systematic optimism. We find that their results are sensitive to the cutoff...

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 paper exploits the 1990 change in capital adequacy regulations to construct more powerful tests of capital and earnings management effects on bank loan loss provisions. We find strong support for the hypothesis that loan loss provisions are used for capital management. We do not find...

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)...

Fudenberg and Tirole (1995) analytically demonstrate that income smoothing can arise in equilibrium if managers are concerned about job security. Consistent with their model, DeFond and Park (1997) show that managers smooth income in consideration of both current and future relative performance....