Date of Award

Spring 5-15-2017

Author's School

Graduate School of Arts and Sciences

Author's Department

Business Administration

Additional Affiliations

Olin Business School

Degree Name

Doctor of Philosophy (PhD)

Degree Type

Dissertation

Abstract

This dissertation studies ex-ante and ex-post economic behavior of institutions facing financial distress. The first chapter analyzes the expansion of safe harbor provisions for repurchase contracts in the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005. The study shows banks increased securitization of mortgages to facilitate the use of mortgage-backed repurchase collateral which became valuable after safe harbor bankruptcy exemptions. The empirical results suggest a possible explanation for the rise of shadow banking before the financial crisis of 2007-2009. The second chapter studies bankrupt firms in an emerging market to understand the need for investor protection in a weak insolvency regime. The results show weak creditor protection during bankruptcy creates perverse incentives for insiders to take advantage of the system resulting in a loss of economic efficiency. The final chapter studies whether financial institutions anticipate distress in industries where they maintain a lending relationship. The results show banks possess industry-level information on borrowers and act on such information. The results inform the financial crisis debate on whether banks acted on early warning signs.

Language

English (en)

Chair and Committee

Radhakrishnan Gopalan

Committee Members

Jennifer Dlugosz, Mark Leary, Xiumin Martin, John Nachbar,

Comments

Permanent URL: https://doi.org/10.7936/K7NP22W8

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Available for download on Saturday, May 15, 2117

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