The main objective of this dissertation is to provide insight into commercial bank decisionmaking in the United States. To this end, commercial bank behavior is explored in three separate essays. Chapter 1 examines the liquidity adjustment behavior of U.S. commercial banks from 1993-2006. A panel vector autoregressive framework is employed to estimate the dynamic responses of bank loans and liquid assets to a variety of bank funding shocks. Orthogonalized impulse responses reveal that banks respond to disruptions in funding by extending less credit and hoarding liquid assets. This paper also highlights functional differences between small and large banks. Large banks generally have access to capital markets and other external funding sources; small banks do not. As a result, small banks are more sensitive to funding disruptions. Balance sheet liquidity is also vitally important for small banks. Small, liquid banks are able to continue lending in response to disruptions in core deposits while illiquid banks are forced to cut lending. Chapter 2 investigates the effects of bank mergers on deposit growth over the period 1994- 2005. The present study differentiates between mergers initiated by small and large banks. We find empirical evidence of deposit runoff to go along with the anecdotal evidence known to the banking community. Contrary to expectation, mergers initiated by large commercial banks are able maintain their deposit levels while mergers between small banks generally lose deposit funding. Chapter 3 analyzes the impact of the Dodd-Frank Act on key segments of the mortgage market. Error correction models of the residential real estate loan share and the non-jumbo loan share indicate that the Dodd-Frank Act coincided with a dramatic decline in both loan share measures. For example, the Dodd-Frank Act had a negative, long-run effect on the non-jumbo loan share for large commercial banks; reducing the non-jumbo loan share by 15.13%. Moreover, the residential real estate share declined by 8.79%. These findings are consistent with commercial banks re-allocating their loan portfolios in favor of high dollar C&I loans, commercial real estate loans, and jumbo mortgages in response to the increased fixed compliance costs of originating loans under the Dodd-Frank Act.

This dissertation investigates agents’ behavior in a world with financial frictions such as financial regulations and information asymmetries. The three chapters of the dissertation are devoted to answering the following questions: Does financial regulation slow credit supply growth by imposing higher lending standards on banks? How does business volatility contribute to the declining firm entry rate in recent decades through credit channel? How does a financially distressed firm respond to risks when it is deemed "too big to fail"? Although widely acknowledged for enhancing financial stability, the Dodd-Frank Act (DFA) has continued to attract criticisms arguing that it contracts credit supply, and, as a consequence, reduces GDP and creates pressure on unemployment. In chapter I, I provide empirical and theoretical evidence on DFA’s negative impacts on credit supply. Based on a structural banking model, I find that DFA has reduced credit supply by at least 3.1% of the current volume of bank credit. This sizable loss partially validates the concern that the Wall Street reform put a strain on the economy and prevented it from fully recovering through credit channels. In chapter II, I present empirical and theoretical evidence suggesting that unexpected surging economic uncertainty hurts startups through credit channel: rising default rates accompanying heightened economic turbulence drive up credit spreads. With startups facing increasing funding costs, entry barriers go up and entry rates decline. Through simulations of an industry model incorporating dynamic entry and exit, I show that unexpected uncertainty shocks can generate larger and more persistent impact on economic outputs in a world with financial frictions than that without the frictions. In Chapter III, I argue that the risk-taking behavior of a financially distressed firm is exacerbated if the equity holders have larger bargaining power over debt holders. Using a firm’s valuation model which permits the endogenous default on the debt, I show that the threshold value triggering risk-taking behavior is positively related to the equity holders’ bargaining power in debt renegotiations. Therefore, firms anticipating a final bailout intentionally undertake more risky investments.

The 2008 subprime mortgage crisis is characterized by an increase in subprime lending and default on such mortgages. A combination of factors, such as risk excessive risk taken on by financial institutions, poorly implemented government housing policies and biased regulation are perceived to have caused the crisis. In response to the crisis, Congress approved the largest bailout of the United States financial system in taxpayer history. Signed into law by President George W. Bush, the Troubled Asset Relief Program (TARP) authorized the federal government to spend hundreds of billions of dollars to purchase distressed assets, including mortgage-backed securities, and provide liquidity to banks. Comprehensive financial reform followed the bailout package in the form of the Dodd-Frank Wall Street Reform and Consumer Protection Act. This paper examines how both pieces of legislation threaten the constitutional protection of economic liberties.

The aim of the thesis is to analyse the non-bank regulatory framework with particular attention devoted to hedge funds and private equity funds. The thesis describes functioning of the funds, discusses their performance during the global financial crisis of 2007-present and, predominantly, describes and analyses the EU and U.S. regulatory reforms with respect to these institutions which have arisen as a response to the crisis. Based on the analysis of the measures incorporated in these reforms, the thesis outlines its own proposal of an alternative investment fund regulatory framework which, if applied, would lead to a more efficient functioning of the alternative investment industry than what is likely to be the outcome of the already adopted reforms. The nature of the thesis is institutional; its methodology is characterized by a broad literature survey. Hedge funds and private equity funds are considered both in pre-crisis context as well as in circumstances that have been brought about by the crisis. Several hypotheses concerning systemic risk and the approach of the regulatory reforms to it are assessed. Mostly qualitative analysis is employed to evaluate the hypotheses.

Thesis advisor: Donald Fishman / The purpose of this thesis is to examine a multitude of concepts related to the phenomenon of whistleblowing. Chinn, Mufson, and Pearlman (2013) underline that we find ourselves “in the age of the whistleblower” and it is therefore imperative to understand this new phenomenon. The visibility of whistleblowers in the media is increasing but whistleblowers are not always portrayed accurately, and, as such, it may be beneficial to examine them in a more legitimate context. As whistleblowers can provide a tremendous service to the public, their organization, and the current economic situation, it is in society’s best interest to understand the whistleblowing process in order to encourage its expansion. The first half of the thesis examines the logistics of the whistleblowing process, the characterization of a whistleblower, and the various groups that can benefit from the whistleblowing phenomenon. This in depth analysis aims to dispel any misconceptions about whistleblowing and provides readers with a comprehensive overview of the literature available on whistleblower dynamics. The second half of the thesis reviews whistleblower laws from their foundation nearly two centuries ago all the way to current developments in whistleblower legislation. It analyzes the strengths and deficiencies of various legal measures and seeks to demonstrate why whistleblower legislation may never fully afford whistleblowers the comprehensive protection they deserve. This section will argue that, though whistleblower legislation has certainly improved in aiming to promote whistleblowing, certain deficiencies remain a permanent part of whistleblower law. / Thesis (BA) — Boston College, 2013. / Submitted to: Boston College. College of Arts and Sciences. / Discipline: Communication Honors Program. / Discipline: Communications.

I syfte att undanröja oegentligheter förekommer det att arbetstagare inom bolag avslöjar uppkomna missförhållanden; så kallad whistleblowing. För svensk rätts vidkommande lagstiftades detta rättsinstitut först år 2017, i syfte att förhindra företeelser såsom marknadsmissbruk, korruption och miljöförstöring. Den nyligen antagna lagstiftningen tycks enligt kritikerna dock innehålla oklara moment. Det är sålunda av vikt att undersöka huruvida lagstiftningen kommer verka effektivt för whistleblower[s]. Skulle lagstiftningen vara att anse otillräcklig och icke förutsebar, föreligger nämligen risk för informationsasymmetrier. För att utreda problematiken är en komparativrättslig studie med stöd av amerikansk rätt avseende whistleblowing relevant. Aktuellt för detta arbete är Sarbanes-Oxley Act och Dodd-Frank Act, vilka antogs år 2002 i genmäle till större redovisningsskandaler inom Enron och Worldcom, respektive marknadskollapsen år 2008 och efterföljande bankkonkurser. Det huvudsakliga syftet var att etablera procedurer för behandling av larm avseende missförhållanden, förbud mot repressalier, samt skadestånds- och straffrättsligt ansvar respektive främjande av finansiell stabilitet. Beträffande svensk rätt har whistleblower[s] erhållit skydd medelst yttrandefrihet, meddelarskydd, arbetsrättsligt skydd, lojalitetsplikt, samt av bolag företagen självreglering. Denna gällande rätt har dock ansetts ofullständig och omständlig. Den för svensk rätts vidkommande antagna lagstiftningen avseende whistleblowing innehåller krav på allvarliga missförhållanden och fog för påstående, samt möjliggörs intern- och externrapporterting. Argumentationen i propositionen framstår emellertid såsom inkonsekvent. Det bör sålunda vara rimligt anta, att de svagheter i svensk rätt som kan återfinnas i regleringen avseende whistleblowing resulterar i ett, för svensk rätts vidkommande, skydd för arbetstagare som är fragmenterat och svårtillämpat. Visserligen har även amerikansk rätt avseende whistleblowing fått utstå kritik. Oavsett reflektioner beträffande kritiken amerikansk rätt mottagit, får amerikansk reglering anses erbjuda tydligare skydd, varför det bör vara möjligt överföra vissa delar av amerikansk rätt till svensk reglering avseende whistleblowing, för att stärka regleringen och möjliggöra att dess ändamål uppfylls. / In order to eliminate irregularities in companies, workers can reveal anomalies; through so-called whistleblowing. In Swedish law, this legal phenomenon was adopted into legislation in 2017. However, according to critics, the legislation contains unclear clauses. Thus, it is important to examine whether the legislation will work effectively. Should the newly adopted legislation be considered inadequate and unpredictable, there is a risk for information asymmetries. Therefore, a comparative legal study with support of American law regarding whistleblowing, is motivated. In this thesis, I will examine the Sarbanes-Oxley Act of 2002 (SOX) as well as the Dodd-Frank Act of 2008, which were adopted in response to the major accounting scandals of Enron and WorldCom, respectively the market collapse in 2008 and subsequent bank failures. In both SOX and the Dodd Frank Act, procedures for the management of whistleblower alarms, prohibitions on reprisals as well as rules on tort and criminal liability were introduced with an aim to promote financial stability. As to Swedish law, whistleblowers have received protection from reprisals by laws regulating freedom of speech, protection of sources, labor law protection, the concept of duty of loyalty, and by companies establishing self-regulation. However, statutory protection of whistleblowers in other laws has been considered incomplete, which is why the legislature has deemed whistleblowing worthy of protection by a separate law only governing whistleblowing. However, the newly adopted Swedish law regarding whistleblowing appears to contain some weaknesses due to inconsistencies and unclear clauses. It is true that American laws regarding whistleblowing have endured criticism. However, it is reasonable to assume that the weaknesses in Swedish law regarding whistleblowing result in a protection for workers, which is fragmented and difficult to apply. Given the fact that American regulation regarding whistleblowing is providing more consistent protection to whistleblowers, Swedish regulators should consider the adoption of certain rules from American law, to strengthen the regulation and allow its purpose to be fulfilled.

The Say on Pay vote, part of the Dodd-Frank Wall Street Reform and Consumer Protection Act signed into law by Barack Obama in July 2010, is a non-binding vote that either approves or disapproves of the compensation given to Named Executive Officers. As of June 21, 2012, there have been 103 companies that have failed to reach 50% approval in this vote. For this paper I analyze the 103 companies over event windows of two, four, and ten days around the date of the failure to test for statistically significant abnormal stock market returns. None of the average cumulative abnormal returns for the three event windows are significant at any level, and I find no evidence that failing the Say on Pay vote corresponds to an increase or decrease in stock market returns.

The main topic of this diploma thesis is a response of the American administration and its legislation to the financial crisis which took place between the years 2007 and 2009 and the resulting changes in the financial markets regulatory rules in the United States. The aim of the thesis is to analyze specific individual sections of the well-known Dodd-Frank Dodd-Frank Wall Street Reform and Consumer Protection Act and its impacts on the banking sector in the US. The first part of the thesis deals with the analysis of main causes of the so-called mortgage financial crisis of the first decade of the 21th century. Numerical evidence shows the impacts into the real economy and channels through which the crisis had spread into financial markets worldwide are also described. The following sections contain in-depth description and analysis of changes in regulatory legislation and rules governing the US banking and other financial institutions.

The master thesis deals with macroprudential policy and its application in the US. The thesis is mainly focused on the large reform of the financial market in the US known as Dodd-Frank Wall Street Reform and Consumer Protection Act. The main objective of the thesis is to analyse the impact of this act on the financial market in the US. The thesis is divided into four chapters, which are logically connected. The first chapter describes the institutional structure of the regulation and supervision over the financial market in the US, with the emphasis on the organisational structure of FED. The second chapter deals with macroprudential policy from the theoretical point of view with the focus on the tools of the policy and its interaction with other policies. It also covers the incentives which lead into putting this policy into practice. The third chapter focuses on the causes of the financial crisis and particularly on the response to the crisis in the form of Dodd-Frank Act. The final chapter analyses the impact of particular measures contained in Dodd-Frank Act on the US financial market. Analysing this the thesis concludes whether these measure were successful from the perspective of objectives that Dodd-Frank Act wanted to meet.

This master thesis deals with causes and some of the main instituonal answers to the financial crisis of 2007-2009. The thesis also ppresents a brief historical overview of US financial crisis. The main aim of the first chapter is to decide whether the US historical crisis have something in common. The answer is that the past crisis really share something and the difference is rather in historical circumstances. The second chapter is dedicated to some of the financial crisis causes such as Community Reinvestment Act,Gramm Leach Bliley Act, Commodity Futures Modernization Act and also to the role of moral hazard. This thesis is of a firm belief that the only aspect that can be blamed is the phenomenon of moral hazard. The last chapter is focused on the main instituonal answers to the crisis. Dodd-Frank Act, Volcker rule, reorganization of derivative market, some of the changes in rating agencies regulation and also BASEL III consequences for capital requirements are all under the radar.