NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH
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João Granja

Booth School of Business
University of Chicago
5807 S. Woodlawn Avenue
Chicago, IL 60637-1610

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NBER Working Papers and Publications

December 2017The 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 2014Selling 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

 
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