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Stanford University
November 15, 2018
We take issue with claims that the funding mix of banks, which makes them fragile and crisis-prone, is efficient because it reflects special liquidity benefits of bank debt. Even aside [...]
The Journal of Finance
October 10, 2017
Firms’ inability to commit to future funding choices has profound consequences for capital structure dynamics. With debt in place, shareholders pervasively resist leverage reductions no matter how much such reductions [...]
Journal of Economic Perspectives
June 26, 2017
Financialized corporate governance as commonly practiced causes significant inefficiencies and harm. Corporations and governments routinely fail to design and enforce rules that reduce the opacity of corporations, create effective commitments [...]
Stanford University Graduate School of Business
May 31, 2016
I discuss the motivations and actions (or inaction) of individuals in the financial system, governments, central banks, academia and the media that collectively contribute to the persistence of a dangerous [...]
National Institute Economic Review
February 2016
Capital regulation is critical to address distortions and externalities from intense conflicts of interest in banking and from the failure of markets to counter incentives for recklessness. The approaches to [...]
bankersnewclothes.com
December 2015
Flawed claims are still made in the policy debate, particularly in the context of proposals that banks be funded with more equity and less debt than current or new regulations [...]
Progress and Confusion: The State of Macroeconomic Policy
June 25, 2015
Flawed and ineffective financial regulation fails to counter, and may exacerbate, distorted incentives within the financial system. The forces that lead to excessive fragility through unnecessary and dangerous levels of [...]
Stanford University Graduate School of Business
September 30, 2014
Excessive leverage (indebtedness) in banking endangers the public and distorts the economy. Yet current and proposed regulations only tweak previous regulations that failed to provide financial stability. This paper discusses [...]
Stanford University Graduate School of Business
February 18, 2013
Supplementing the discussion in our book The Bankers’ New Clothes: What’s Wrong with Banking and What to Do about It, this paper examines the plausibility and relevance of claims in [...]
Federal Reserve Bank of Atlanta
March 23, 2011
We examine the pervasive view that “equity is expensive,” which leads to claims that high capital requirements are costly and would affect credit markets adversely. We find that arguments made [...]
Stanford University Graduate School of Business
April 29, 2010
While it is recognized that the high degree of leverage used by financial institutions creates systemic risks and other negative externalities, many argue that equity financing is “expensive,” and that [...]
Stanford University Graduate School of Business
July 2007
We examine whether a large shareholder can alleviate conflicts of interest between managers and shareholders through the credible threat of exit on the basis of private information. In our model [...]
Stanford University Graduate School of Business
January 1999
We analyze a model of voluntary disclosure by firms in financial market and the desirability of disclosure regulation. In our model firms choose the precision of their disclosure. Disclosure is [...]
North Carolina Banking Institute
2013
Anat Admati argues that the banking system is too fragile and inefficient, and that reform efforts have been flawed. The fragility of the system causes booms and busts, and busts [...]
UCLA Law Review
2012
While excessive bank debt can impose overwhelming costs on the broader economy, some contend that there may be some benefits from debt for a firm’s corporate governance. In particular, some [...]
Journal of Business
1997
In this article we examine theoretically the use of benchmark portfolios in the compensation of privately informed portfolio managers. We find that the use of benchmarks often observed in practice, [...]