Working Papers:
Government Asset Guarantees in Failed Bank Resolutions. (solo-authored) SSRN
Revise and Resubmit at The Journal of Finance
2021 Semifinalist for FMA Best Paper Award in Financial Institutions and Markets
Presented at: Financial Intermediation Research Society, Finance Down Under, OCC Symposium on Emerging Risks in the Banking System, FDIC Fall Bank Research Conference, Conference on Financial Economics and Accounting, Midwest Finance Association, FARS Midyear Meeting, Financial Management Association, IBEFA Summer Meeting, Tulane Accounting Mini-Conference, Australasian Finance and Banking Conference, Southern Finance Association, AFFECT Mentoring Workshop, University of Oregon, FDIC, Tulane University, Northern Finance Association (scheduled)
Bank Stress Test Disclosures and Private Information Production. (with P. Barrett Wheeler) SSRN
Revise and Resubmit at The Accounting Review (fourth round)
2021 Semifinalist for FMA Best Paper Award in Financial Institutions and Markets
Presented at: Joint Virtual Workshop by the Research Group of the Basel Committee on Banking Supervision, Deutsche Bundesbank and the Centre for Economic Policy Research, FARS Midyear Meeting*, Federal Reserve Stress Testing Research Conference, Northern Finance Association, Conference on Financial Economics and Accounting, St. Louis Federal Reserve and Indiana University Workshop on Financial Institutions Research*, Financial Management Association, Pennsylvania State University (accounting)*, Tulane University, FDIC, Southern Methodist University (accounting)*
Insider Trading Reforms and Corporate Transparency: Evidence from the STOCK Act. (with Zhige Yu and Youan Wang) SSRN
Presented at: American Finance Association, Conference on Financial Economics and Accounting (CFEA), Financial Management Association*, Accounting and Business Research - Fudan University Joint Conference*, Villanova University, University of Nebraska, Xiamen University*, Hong Kong University*, Swiss Accounting Research Alpine Camp*, Accounting Perspectives Emerging Scholars Virtual Symposium*, Institute for Financial and Accounting Studies Seminar*, Vietnam Symposium in Banking and Finance*, New Zealand Finance Meeting*, Vietnam Symposium in Entrepreneurship, Finance and Innovation*, 15th TJAR Conference*, Midwest Finance Association
When Regulation Misses the Market: Product Specific Spillovers and Credit Reallocation. (with John Kandrac) SSRN
Presented at: IBEFA Summer Meeting, ESSFM Gerzensesee (evening session), Federal Reserve Board of Governors*, Federal Deposit Insurance Corporation, Financial Management Association*, AFFECT early ideas session, IBEFA Summer Meeting
Creditor Rights, Information Sharing, and Borrower Behavior: Theory and Evidence. (with John H. Boyd and Hendrik Hakenes) SSRN
2018 International Conference on Banking and Economic Development Best Paper Award
Presented at: International Conference on Banking and Economic Development, China International Conference in Finance, Financial Intermediation Research Society, University of Regensburg*, University of Konstanz*, University of Bonn*, Collaborative Research Center Transregio 224*, German Economic Association*, Federal Reserve Bank of Boston, Federal Reserve Bank of Richmond, Federal Reserve Board of Governors, Florida State University, Pepperdine University (Graziadio), Tulane University (Freeman), University of Georgia (Terry), University of Colorado at Boulder (Leeds), University of Hawaii (Shidler), DePaul University (Driehaus), University of Wisconsin at Milwaukee (Lubar), University of San Diego, University of Minnesota (Carlson)
The Disappearing Earnings Announcement Premium. (with Gans Narayanamoorthy and Morad Zekhnini) SSRN
2019 Wellington Finance Summit Best Paper Award
Presented at: Wellington Finance Summit, Chinese Accounting Professors' Association of North America (CAPANA), American Accounting Association*, University of Toronto*, Tulane University, IIMB Online Accounting Research Conference*, Financial Intermediation Research Society (canceled), Financial Management Association, Midwest Finance Association, City University London
Change in Capitol: How a 60 Minutes Expose and the STOCK Act Affected the Investment Activity of U.S. Senators. (with Ian Cherry and Candace Jens) SSRN
Presented at: European Finance Association, 28th Annual Conference on Financial Economics and Accounting, Louisiana State University, Tulane University
Published Papers:
Quick on the Draw: Liquidity Risk Mitigation in Failing Banks. The Review of Finance (Accepted) (with Alex Ufier and Jeff Traczynski) SSRN
Analyzing proprietary transaction-level HELOC data, we isolate the liquidity channel and find that during financial stress, banks manage liquidity risk by restricting consumer access to cancellable credit lines. Credit lines with riskier loan characteristics at origination and large undrawn balances over time are more likely to be revoked. Our findings intensify as banks approach failure, despite constant HELOC drawdown rates. Before bank distress, existing borrower relationships have no impact on credit revocation decisions. Banks close to failure cut HELOCs for borrowers with greater ability to demand liquidity, suggesting that relationships harm some borrowers during bank stress, thereby revealing a dark side of banking relationships. Aggregating across all banks, our estimates imply an economy-wide $14 billion contraction in undrawn commitments if all banks restricted liquidity outflows like failing institutions. These findings highlight a previously unexplored consumer channel of liquidity management with important implications for household credit access and bank risk management.
Bank Monitoring with On-Site Inspections. The Journal of Finance, 2026, 81(2): 687-737. (with Christopher Martin and Alexander Ufier) SSRN
2022 FMA Best Paper Award in Financial Institutions and Markets
2023 Eastern Finance Association Best Paper Award in Financial Institutions
2022 Runner-Up Community Bank Research Conference Best Paper Award
Using proprietary transaction-level data on nonsyndicated construction loans, we provide some of the first empirical evidence on the drivers and consequences of bank monitoring through on-site inspections. Banks trade off monitoring intensity with favorable origination terms. Monitoring intensity escalates in response to local economic downturns or the bank's financial instability. Borrowers with negative inspection reports have more draw requests denied, suggesting that monitoring outcomes impact credit decisions. Both the occurrence and threat of increased inspection frequency correspond to reduced defaults. Overall, our results provide empirical support for a substantial body of theoretical literature on bank monitoring.
The Power of the People: Labor Unions and Corporate Social Responsibility. The Review of Finance, 2024, 28(6): 1833–1879. (with Youan Wang and Zigan Wang) SSRN
Many policymakers and practitioners argue that corporations may become more stakeholder focused if employees are given more power. We study the causal impact of unionization on stakeholders by analyzing how close labor union elections affect environmental and social (E&S) scores. We find that unionization is associated with an increase in internal social scores that primarily benefit employees and a decrease in external E&S scores that primarily benefit non-employees. The negative effects on external E&S are amplified when firms have greater financial constraints. The effects on both internal and external E&S are magnified when labor unions have more bargaining power. Our results suggest that policymakers consider implications for all stakeholders before implementing policies that prioritize the corporate influence of one stakeholder group.
Corporate Political Connections and Favorable Environmental Regulation Enforcement. Management Science, 2023, 69(12): 7151-7882(with Youan Wang and Zigan Wang) SSRN
We examine whether the Environmental Protection Agency (EPA) uniformly enforces the Clean Air Act for politically connected and unconnected firms using a close election setting. We find no difference in regulated pollutant emissions or EPA investigations between the two groups, although connected firms experience less regulatory enforcement and lower penalties. These results are more pronounced for firms connected to politicians capable of influencing regulatory bureaucrats and for connected firms that are more important to their supported politicians. Taken together, our results show that campaign contributions can indirectly benefit firms by way of reduced environmental regulatory enforcement and penalties.
Creditor Rights and Bank Losses. Journal of Financial and Quantitative Analysis, 2021, 56:2800--2842 (with Gans Narayanamoorthy) SSRN
We develop hypotheses regarding the association between two types of creditor rights and bank loan losses. Contrary to prior research conclusions, bank lending risk is negatively associated with both restrictions on reorganization and the secured creditor being paid first. Using accounting disclosures, we develop novel empirical measures of the probability of default (PD) and loss given default (LGD) at the loan-portfolio level. Different types of creditor rights have differential effects pertaining to PD and LGD and exhibit significant intertemporal variation. We corroborate our cross-country findings using the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA) shock to creditor rights.
Bank Monitoring, Distance, and Delegation. AEA Papers and Proceedings, 2023, 113:117-181. (with Christopher Martin and Alexander Ufier) Link
The Social Costs and Benefits of Too-Big-To-Fail Banks: A "Bounding" Exercise. The Journal of Banking & Finance, 2016, 68: 251-265 (with John H. Boyd) Link
While the policy of too-big-to-fail has received wide attention in the literature, there is little agreement regarding economies of scale for financial firms. We take the stand that systemic risk increases when the larger players in the financial sector have a larger share of output. Calculations indicate that the cost to the macro-economy due to increased systemic risk is always much larger than the potential benefit due to scale economies. When distributional and intergenerational issues are considered, the potential benefits to economies of scale are unlikely to ever exceed the potential costs due to increased risk of a banking crisis.