One major lesson from the 2008-09 financial crisis that subsequently shaped in part the regulatory framework that emerged in the last decade was that downgrades of securities occurring in an interconnected financial system create a need for capital relief for regulated entities. This happens because banks’ and insurers’ capital requirements are based on credit ratings. The question is what kind of short-term and long-term incentives arise from such relief programs.… Read More »Paper Spotlight: Rethinking the Use of Credit Ratings in Capital Regulations: Evidence From the Insurance Industry

The video of Thomas Philippon’s keynote presentation at Cavalcade North America 2020 can now be viewed on the Cavalcade web site.

The Review of Corporate Financial Studies (RCFS) is enacting a Code Sharing Policy for papers accepted for publication, which will be effective on October 1, 2020. The policy is available here. This policy reflects the commitment of the RCFS to the highest standards of quality, as we believe that the policy will help improve the reproducibility and replicability of published research and by this will support the credibility and impact… Read More »Code Sharing Policy

                Sharp recessions and prolonged market stress periods are accompanied by drying up of equity and corporate bond issues, a big challenge for firms because the need for capital is very high during such periods. Disentangling supply-driven from demand-driven reasons is very problematic. In this paper, Michael Halling, Jin Yu, and Josef Zechner use the ongoing COVID-19 pandemic, a truly exogenous demand shock,… Read More »Paper Spotlight: How Did COVID-19 Affect Firms’ Access to Public Capital Markets?