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Paper Spotlight: Rethinking the Use of Credit Ratings in Capital Regulations: Evidence From the Insurance Industry

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

Cavalcade Videos Now Available

Videos of the keynotes and paper presentations at Cavalcade North America 2020 are now available on the Cavalcade web site. Our thanks to the Kelley Learning Media team at the Kelley School of Business at Indiana University for preparing the videos.

Keynote Video

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

Keynote Video

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

Camelia Kuhnen Joining the RCFS Team

We are pleased to announce that Camelia Kuhnen is joining RCFS as an editor. Camelia is a professor of finance and Sarah Graham Kenan distinguished scholar at UNC Kenan-Flagler and a faculty research associate at NBER. She is an expert in household finance, neuroeconomics, and corporate finance. She is currently an associate editor at the Journal of Finance, the Review of Financial Studies, and Management Science. Camelia previously served as president… Read More »Camelia Kuhnen Joining the RCFS Team

Forthcoming Paper

“Double-Adjusted Mutual Fund Performance” by Jeffrey Busse, Lei Jiang, and Yuehua Tang

Code Sharing Policy

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

Paper Spotlight: How Did COVID-19 Affect Firms’ Access to Public Capital Markets?

                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?

Paper Spotlight: Historical Returns of the Market Portfolio

            The market portfolio plays a special role in asset pricing. Although many finance researchers use a U.S. equity portfolio to proxy for the market portfolio, theory usually dictates a broad, world portfolio that includes global equities, global real estate, commodities, and fixed income. In a new Review of Asset Pricing Studies paper, “Historical Returns of the Market Portfolio,” Ronald Doeswijk, Trevin Lam, and Laurens… Read More »Paper Spotlight: Historical Returns of the Market Portfolio

Paper Spotlight: Do Proxies for Informed Trading Measure Informed Trading? Evidence from Illegal Insider Trades

Reliable proxies for informed trading are required to test many theories in finance. Theory suggests several possible proxies; however, validating these empirically has been challenging because trades by informed investors cannot (in general) be observed. Kenneth Ahern’s new paper, “Do Proxies for Informed Trading Measure Informed Trading? Evidence from Illegal Insider Trades,” addresses this challenge by using hand-collected data on illegal insider trades. He shows that the effective bid-ask spread… Read More »Paper Spotlight: Do Proxies for Informed Trading Measure Informed Trading? Evidence from Illegal Insider Trades