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作者：Charoenwong, Ben; Kowaleski, Zachary T.; Kwan, Alan; Sutherland, Andrew G.
作者单位：National University of Singapore; University of Texas System; University of Texas Austin; University of Hong Kong; Massachusetts Institute of Technology (MIT)
摘要：Compliance-driven investments in technology-or RegTech-are growing rapidly. To understand the effects on the financial sector, we study firms' responses to new internal control requirements. Affected firms make significant investments in ERP and hardware. These expenditures then enable complementary investments that are leveraged for noncompliance purposes, leading to modest savings from avoided customer complaints and misconduct. IT budgets rise and profits fall, especially at small firms, an...
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作者：Cao, Sean; Jiang, Wei; Wang, Junbo; Yang, Baozhong
作者单位：University System of Maryland; University of Maryland College Park; Emory University; Louisiana State University System; Louisiana State University; University System of Georgia; Georgia State University
摘要：An AI analyst trained to digest corporate disclosures, industry trends, and macroeconomic indicators surpasses most analysts in stock return predictions. Nevertheless, humans win Man vs. Machinewhen institutional knowledge is crucial, e.g., involving intangible assets and financial distress. AI wins when information is transparent but voluminous. Humans provide significant incremental value in Man + Machine, which also substantially reduces extreme errors. Analysts catch up with machines after...
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作者：Huang, Chong; Lunawat, Radhika; Wang, Qiguang
作者单位：University of California System; University of California Irvine; Hong Kong Baptist University
摘要：Investors often hold differing opinions on public information quality. This paper shows that such investor disagreement provides a novel explanation for financial market dynamics around earnings announcements. We propose a rational expectations equilibrium model where investors disagree about the precision of a public signal, which separates a pre-news trading period from a post-news trading period. In equilibrium, investor disagreement about public signal precision diminishes informational pr...
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作者：Andrews, Spencer; Colacito, Riccardo; Croce, Mariano M.; Gavazzoni, Federico
作者单位：Office of Financial Research; University of North Carolina; University of North Carolina Chapel Hill; National Bureau of Economic Research; Bocconi University; Centre for Economic Policy Research - UK; Bocconi University; BI Norwegian Business School
摘要：The slope carry takes a long (short) position in the long-term bonds of countries with steeper (flatter) yield curves. The traditional carry takes a long (short) position in countries with high (low) short-term rates. We document that: (i) the slope carry return is slightly negative (strongly positive) in the pre (post) 2008 period, whereas it is concealed over longer samples; (ii) the traditional carry return is lower post-2008; and (iii) expected global growth and inflation declined post-200...
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作者：Granja, Joao; Leuz, Christian
作者单位：University of Chicago; Center for Economic & Policy Research (CEPR); University of Chicago; University of Chicago; National Bureau of Economic Research
摘要：We exploit the extinction of the thrift supervisor (OTS) to analyze the effects of supervision on bank lending and bank management. We first show that the OTS replacement resulted in stricter supervision of former OTS banks. Next, we analyze the ensuing lending effects and show that former OTS banks on average increase small business lending by roughly 10 percent. This increase is concentrated in well -capitalized banks and especially in banks that changed management practices following the su...
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作者：Greenwald, Daniel L.; Howell, Sabrina T.; Li, Cangyuan; Yimfor, Emmanuel
作者单位：New York University; Columbia University
摘要：When race is not directly observed, regulators and analysts commonly predict it using algorithms based on last name and address. In small business lending-where regulators assess fair lending law compliance using the Bayesian Improved Surname Geocoding (BISG) algorithm-we document large prediction errors among Black Americans. The errors bias measured racial disparities in loan approval rates downward by 43%, with greater bias for traditional vs. fintech lenders. Regulation using self-identifi...
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作者：Cronqvist, Henrik; Ladika, Tomislav; Pazaj, Elisa; Sautner, Zacharias
作者单位：Chapman University System; Chapman University; University of Amsterdam; University of Zurich; Swiss Finance Institute (SFI)
摘要：We show that firm valuations fell after a key expense became more visible in financial statements. FAS 123R required firms to deduct option compensation costs from earnings, instead of disclosing them in footnotes. Firms that granted high option pay experienced earnings reductions, while fundamentals remained unchanged. These firms were more likely to miss earnings forecasts, and they experienced recommendation downgrades and valuation declines. Our findings suggest that market participants ex...
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作者：Davydiuk, Tetiana; Marchuk, Tatyana; Rosen, Samuel
作者单位：Johns Hopkins University; BI Norwegian Business School; Centre for Economic Policy Research - UK; Pennsylvania Commonwealth System of Higher Education (PCSHE); Temple University
摘要：This paper studies the rise of direct lending using a comprehensive dataset of investments by business development companies (BDC). We exploit three exogenous shocks to credit supply, including new banking regulations and a major finance company collapse, to establish that BDC capital acts as a substitute for traditional financing. Using firm-level data, we further document that firms' access to BDC funding stimulates their employment growth and patenting activity. Beyond credit provision, BDC...
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作者：Doshi, Hitesh; Ericsson, Jan; Fournier, Mathieu; Seo, Sang Byung
作者单位：University of Houston System; University of Houston; McGill University; University of Wisconsin System; University of Wisconsin Madison
摘要：We develop a structural credit risk model, which allows us to price equity/credit indices and their options through the asset dynamics of index constituents. We estimate the model via MLE and find that equity and credit index option prices are well explained out-of-sample. Contrary to recent empirical findings, the two option markets are not inconsistently priced through the lens of our model. Returns on both options, while extreme, do not indicate any evidence of mispricing. Our analysis sugg...
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作者：Bosshardt, Joshua; Di Maggio, Marco; Kakhbod, Ali; Kermani, Amir
作者单位：Federal Housing Finance Agency; Imperial College London; National Bureau of Economic Research
摘要：This paper studies how tightening monetary policy transmits to the economy through the mortgage market and sheds new light on the distributional consequences at both individual and regional levels. We specifically examine the sharp increase in mortgage interest rates during 2022 and 2023. We find that almost all of the decline in mortgages compared to prior years was concentrated in loans that would have had a debt-to- income (DTI) ratio above underwriting thresholds. These effects are even mo...
