Booth School of Business
University of Chicago
5807 S. Woodlawn Avenue
Chicago, IL 60637-1610
Information about this author at RePEc
NBER Working Papers and Publications
|October 2018||Going the Extra Mile: Distant Lending and Credit Cycles|
with Christian Leuz, Raghuram Rajan: w25196
We examine the degree to which competition amongst lenders interacts with the cyclicality in lending standards using a simple measure, the average physical distance of borrowers from banks’ branches. We propose that this novel measure captures the extent to which lenders are willing to stretch their lending portfolio. Consistent with this idea, we find a significant cyclical component in the evolution of lending distances. Distances widen considerably when credit conditions are lax and shorten considerably when credit conditions become tighter. Next, we show that a sharp departure from the trend in distance between banks and borrowers is indicative of increased risk taking. Finally, we provide evidence that as competition in banks’ local markets increases, their willingness to make loans a...
|December 2017||The Death of a Regulator: Strict Supervision, Bank Lending and Business Activity|
with Christian Leuz: w24168
An important question in banking is how strict supervision affects bank lending and in turn local business activity. Forcing banks to recognize losses could choke off lending and amplify local economic woes, especially after financial crises. But stricter supervision could also lead to changes in how banks assess loans and manage their loan portfolios. Estimating such effects is challenging. We exploit the extinction of the thrift regulator (OTS) – a large change in prudential supervision, affecting ten percent of all U.S. depository institutions. Using this event, we analyze economic links between strict supervision, bank lending and business activity. We first show that the OTS replacement indeed resulted in stricter supervision of former OTS banks. We then analyze the lending effects of...
|August 2014||Selling Failed Banks|
with Gregor Matvos, Amit Seru: w20410
We study the recent episode of bank failures and provide simple facts to better understand who acquires failed banks and which forces drive the losses that the FDIC realizes from these sales. We document three distinct forces related to the allocation of failed banks to potential acquirers. First, a geographically proximate bank is significantly more likely to acquire a failed bank: only 15% of acquirers do not have branches within the state. Sales are more local in regions with more soft information. Second, a failed bank is more likely to be purchased by a bank that has a similar loan portfolio and that offers similar services, highlighting the role of failed banks' asset specificity. Third, low capitalization of potential acquirers decreases their ability to acquire a failed bank and po...
Published: JOÃO GRANJA & GREGOR MATVOS & AMIT SERU, 2017. "Selling Failed Banks," The Journal of Finance, vol 72(4), pages 1723-1784. citation courtesy of