Research Interests: Banking, Corporate Finance, Credit Risk, Subprime Mortgage Crisis, and IPOs/SEOs.
My research covers a broad range of topics in corporate finance, banking, and credit risk. My recent research work
is mostly related to banking, subprime mortgage crisis, and incentives of government agencies. These papers analyze
causes and consequences of financial crisis, incentive issues in securitization markets, and the effect of market
pressure on bureaucracies' actions. Some of my earlier work has analyzed the effect of default risk on corporate financial policies,
and equity returns. In addition, several of my papers focus on corporate financing decisions involving IPOs and
SEOs. I analyze the determinants of these decisions, as well as their effects on security returns in financial
Recent Working Papers:
New Paper: "The Strategic Under-Reporting of Bank Risk", with Taylor Begley and Kuncheng Zheng.
Abstract: We show that banks with lower equity capital significantly under-report their risk in
trading books. The under-reporting is especially high during periods of high systemic risk, and for
banks with large trading activity. These results are consistent with the view that banks
under-report their risks to lower their regulatory capital requirements, and to present themselves
as relatively safe institutions to other market participants. Risk-based capital requirements are
designed to prevent banks with lower equity capital from failing, especially during periods of high
systemic risk. Our results show that the current regulation provides reporting incentives that
make the risk-measure least informative precisely when it matters the most.