Monthly Archives: November 2019

Spillover Effects in Securities Litigation

By | November 25, 2019

Courtesy of Dain Donelson, Rachel Flam, and Christopher Yust When a firm is sued, do its peers respond to the litigation by changing their own behavior? In our recent paper, we examine the spillover effect of securities litigation on industry peers. We focus on investor reactions and changes in peers’ disclosure and financial reporting. We… Read More »

Issuing a Central Bank Digital Currency: Possible Motives, Characteristics and Consequences

By | November 21, 2019

Courtesy of Christian Pfister* In 2018, the Bank for International Settlements conducted a survey to which 63 central banks responded. According to the results, 70% of the central banks were then (or planned to be soon) engaged in central bank digital currency (CBDC) work. However, only three central banks reported that they were likely to… Read More »

Inconsistent Implementation of the FRTB Could Jeopardize Post-Crisis Banking Reforms

By | November 20, 2019

Courtesy of Mete Feridun Disclaimer: The views and opinions expressed in this blog are those of the author and do not necessarily reflect the official views and opinions of PwC. In response to the global financial crisis, the Basel Committee initiated an overhaul of the market risk capital rules to address shortcomings in the current… Read More »

The Impact of Financial Misconduct on Employee Satisfaction

By | November 18, 2019

Courtesy of Yuqing Zhou and Christos Makridis Our recent paper uses data from Glassdoor to investigate changes in employees’ perceptions of firms and managers during periods of financial misconduct and after the public announcement of misconduct. Employees’ perceptions are critical for a few reasons. First, employee satisfaction is important for firm productivity. Second, employee satisfaction… Read More »

The Effect of Stardom on the Informativeness of a CEO’s Insider Trades

By | November 13, 2019

Courtesy of Sanjiv Sabherwal and Mohammad Uddin There are many studies on insider trading by corporate CEOs. There are also some studies that examine whether celebrity, or star CEOs, create more value for their firms and investors. However, no studies, until now, have attempted to identify whether there is a difference in the information content… Read More »

Blockchain Finance: On the Prospect of Decentralized, Pseudonymous Financial Markets

By | November 12, 2019

Courtesy of Cameron Harwick and James Caton  The Bitcoin blockchain was launched in 2009, providing for the first time a secure, decentralized, and electronic platform for monetary exchange. It was not purely anonymous – public account information was available – but users did not have to know or trust each other in order to participate in “money”… Read More »

Access to Safe Assets and Financial Stability

By | November 11, 2019

Courtesy of Marco Macchiavelli In September 2013, the Federal Reserve (Fed) introduced the Overnight Reverse Repurchase (ONRRP) facility to improve its control over short-term interest rates (Frost et al. 2015). To achieve this goal, the Fed offers safe assets in the form of overnight reverse repos to a broad range of market participants, including money… Read More »

Financial Stability Needs Macro-Financial Regulation of Banking M&A

By | November 8, 2019

Courtesy of Eduard Dzhagityan Guided by the objectives of international banking regulation reform in the post-crisis period (Basel III), I explore the idea of risk-centered regulation of mergers and acquisitions (M&A) deals. This idea introduces a new set of microprudential standards aimed at improving both the integrity of M&A and the stress resilience of the… Read More »

About the Rise of Socially Responsible Investors: Monitoring and Valuation Effects

By | November 6, 2019

Courtesy of Othar Kordsachia Background In 2006, the United Nations Principles for Responsible Investing (UN PRI) adopted a sustainability-based decision framework for large institutional investors that moved socially ‘responsible investments’[1] from the margins to the mainstream. Today, assets managed by signatories to the UN PRI are in excess of 80 trillion US dollars. The mission… Read More »

Governance in the Absence of Regulation: A Study of Initial Coin Offerings

By | November 5, 2019

Courtesy of William C. Johnson and Sangho Yi Initial Coin Offerings (ICOs) are a novel financing method in which crypto tokens are auctioned to the public in return for fiat or cryptocurrencies using blockchain-based platforms such as Ethereum. The technology building ICOs creates a new landscape within financial economics where many important economic concepts need… Read More »