There are two main creditors in commercial real estate: arm's-length investors and banks. We model commercial mortgage-backed securities (CMBS) as the less informed source of credit. In equilibrium, these investors fund properties with a low probability of distress and banks fund properties that...

The purpose of this paper, structured in three Sections, is twofold: (a) The first is to analyse the conditions under which a group of financial firms is considered to be a ‘financial conglomerate' in accordance with the (complex) definition of this term in Article 2 (point (14)) of the...

We examine whether media coverage influences firms' debt financing and, more importantly, the channels through which it occurs. We find that more media coverage significantly reduces firms' reliance on bank loans while increasing their nonbank debt financing. This effect is concentrated among...

We examine the usage of debt by small firms trading on the over-the-counter (OTC) market and filing annual reports with the SEC. Similar to firms included in the Survey of Small Business Finance, the small OTC firms in our sample are more dependent on debt financing than firms listed on the NYSE...

Crises challenge client XVA management because the prices of derivatives contain the XVA hedges that the provider requires, as well as the functional hedge the client requires. By functional hedge we mean the hedge linked to the client's business, e.g. FX, inflation, interest rate. By XVA hedge...

We analyze the difference between credit default swap (CDS) and syndicated loan spreads, defined as the “CDS-loan basis”. Our results indicate that the CDS-loan basis is greater when the cost of information asymmetry is higher, such as for riskier borrowers and in economic downturns. Our...

The existing replication policies at top finance journals are far weaker than the policies at top economics journals. This paper explores both the costs and benefits of having a stronger replication policy in the context of my failed 2010 initiative to develop a unified policy across all top...

Recent advances in digital technology and big data have allowed FinTech (financial technology)lending to emerge as a potentially promising solution to reduce the cost of credit and increasefinancial inclusion. However, machine learning (ML) methods that lie at the heart of FinTech credithave...

Bank capital is the cornerstone of bank regulation and is considered a key determinant of a bank's ability to withstand economic shocks. In the area of bank capital regulation, the general view is that more bank capital is better, irrespective of who provides it. In this paper, we investigate...

We study secured lending contracts using a novel, loan-by-loan database of bilateral repurchase agreements in which borrower quality is fixed and collateral quality is known. Holding all risk factors constant except collateral quality, we show that loans on riskier collateral have higher...