We examine the relative timeliness with which asset write-downs incorporate adverse macroeconomic outcomes versus adverse firm-specific outcomes. We posit that, compared to adverse macroeconomic outcomes, adverse firm-specific outcomes exhibit high information asymmetry between firm managers and...

We hypothesize and provide evidence that certain general characteristics of banks' loan securitizations accounted for as sales determine the extent to which banks retain the risks of the securitized loans. We show that banks retain more risk when: (1) the types of loans have higher and/or less...

Prior research shows that during the pre-1990 bust financially weak banks managed income upward by delaying provisions for losses on heterogeneous loans. In contrast, we predict and find that during the 1990s boom profitable banks managed income downward by accelerating provisions for losses on...

We compare the accuracy of analyst (I/B/E/S consensus) and earnings-to-price ratio (E/P)-based forecasts of annual earnings across firms. We find that generalizations of Beaver Lambert and Morse's (BLM 1980) E/P-based forecasting model are more accurate than analyst forecasts both for most firms...

We provide evidence that banks smooth income by managing provisions for loan losses and loan charge-offs in a coordinated fashion that varies across the bust and boom phases of the business cycle and across homogeneous and heterogeneous loan types. In particular, during the 1990s boom, we...

We hypothesize and provide evidence that characteristics of banks' loan securitizations accounted for as sales determine the extent to which banks retain the risks of the securitized loans. We show that banks retain more risk when: (1) the types of loans have higher and/or less externally...

Prior research has found that loan loss provisions are positively associated with bank stock returns and future cash flows, conditional on less discretionary information about loan default. We find that these positive valuation implications obtain only for loan loss provisions for low regulatory...