We show that investors reach for yield by taking more duration risk along with more credit risk. The two types of risk-taking behavior have opposite effects on borrowing firms. Higher credit risk-taking increases credit supply to riskier firms. Higher duration risk-taking by investors pushes...

Non-bank mortgage originators, which operate through the originate-to-distribute (OTD) model, account for more than half of all the mortgage origination in the U.S. However, less is known about which factors drive the quality and quantity of mortgage originations through non-banks. I show that...

We document a major mechanism – inorganic growth – which drives a wedge between micro-study effects of credit supply shocks and aggregate effects. Exploiting a quasi-exogenous positive shock to credit supply, we document that affected firms borrow larger amounts and exhibit stronger asset,...

We explore empirically how the time-varying allocation of credit across firms with heterogeneous credit quality matters for financial stability outcomes. Using firm-level data for 55 countries over 1991-2016, we show that the riskiness of credit allocation, captured by Greenwood and Hanson...

Securitized loans have lower lead bank shares but larger shares held by non-CLO institutional investors than non-securitized loans. The result can largely be explained by their degree of information asymmetry and credit risk. We find that lead banks increase their holdings after a...

The Foreign Exchange Department of a bank performs foreign exchange operations as well as transactions. The main function of a forex department is to handle foreign inward remittances as well as outward remittances as well as buying and selling of foreign currencies. In some cases, Foreign...

Purpose – The purpose of this paper is to indicate an innovative solution to address the financing issues faced by “Micro-, Small and Medium Enterprises” (MSME) in emerging economies. Design/methodology/approach – Islamic Financial Institutions (IFIs) especially Islamic banks are...

The definition of EBITDA is among the most important parts of a credit agreement. This concept matters to borrowers and creditors because it frequently determines whether a borrower is in breach of its covenants in the loan, and it matters to regulators because it determines the amount of...

This Article is the first to analyze an unexplored but critical change in how modern banks are governed: the rise of lawyers as bank directors. That rise has been precipitous, raising the question of why lawyer-directors now sit on most bank boards. Using novel empirical evidence, we show that...

Cash department is an important department of any bank. It is the main source of all banking activities for the reason every day bank has to remain certain amount in cash in accordance with the rules and regulations. This department is a very sensitive organ of a bank. The procedures of...