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.

<p>Poor people often lack collateral, which is one of the reasons that they have no access to</p><p>formal financial institutions. Microfinance institutions (MFIs) provide financial services to</p><p>poor people. Traditional MFIs have received some criticism, for instance that they do not</p><p>target the poorest of the poor. This paper, with a field study from Dhaka, takes a closer look at</p><p>SafeSave, a new MFI working in a quite different way than the traditional MFIs in</p><p>Bangladesh. The conclusion of this paper is that SafeSave’s more flexible services are able to</p><p>reach the poor better than the services of traditional MFIs, but might not be the best solution</p><p>seen from a long-term development perspective.</p>

Poor people often lack collateral, which is one of the reasons that they have no access to formal financial institutions. Microfinance institutions (MFIs) provide financial services to poor people. Traditional MFIs have received some criticism, for instance that they do not target the poorest of the poor. This paper, with a field study from Dhaka, takes a closer look at SafeSave, a new MFI working in a quite different way than the traditional MFIs in Bangladesh. The conclusion of this paper is that SafeSave’s more flexible services are able to reach the poor better than the services of traditional MFIs, but might not be the best solution seen from a long-term development perspective.

The potential of small and micro-enterprises (SMEs) in promoting economic growth in both developed and developing countries is widely accepted and documented by both scholars and policy makers. Lack of access to sufficient financing for these SMEs, especially in developing countries, has been identified as a major bottleneck in realising this potential. Bank credit is one of the major ways of addressing the challenge of inadequate funding that exists in the SME sector. This study was undertaken in order to explore the experiences of bank loan officers and SME borrowers in credit extension to the SME sector in Uganda. The research methodology used multiple methods of data collection which enabled an element of triangulation to be built into the study design. Data was collected both from the supply-side (bank loan officers) and the demand-side (SME borrowers), and entailed unstructured and semi-structured interviews and a questionnaire survey of loan officer and SME borrower experience. Further data was collected through direct observation of the interactive interviews between loan officers and borrowers, which enabled a unique opportunity to enhance the understanding of experiences of loan officers and borrowers. This method offers a development of extant methodologies that have been used to assess bank lending to SMEs, typically indirect methods such as verbal protocols and hypothetical business plans. The supply-side findings suggest that, in addition to the bank lending guidelines and procedures, the organisational context in terms of institutional structure, borrower attributes (especially their knowledge of bank lending guidelines and procedures) and level of congruence between loan officers and organisational goals are important determining factors of credit flow to SMEs. This implies that the context in which lending guidelines are implemented is as vital as the application of these guidelines. Banks are, therefore, challenged to ensure a favourable organisational context in order to facilitate loan officer decisions. On the credit demand side, it was found that borrowers seek to play an active role in the lender-borrower relationship which, in turn, influences decisions made by loan officers. It was established that, in pursuit of this role, borrowers deliberately pre-plan loan requests in an effort to influence the results of the evaluation of their loan applications by loan officers. At times, borrowers intentionally manipulate the information they disclose to loan officers in order to enhance their chances of obtaining credit from banks. The findings also suggest that, in most cases, the borrowers with some knowledge of bank lending guidelines and procedures find it easier to access credit than their counterparts who lack this knowledge. With regard to women-owned SMEs, while there little evidence of ‘official’ discrimination against women-owned SMEs by bank lending policies, there are systematic, cultural, social and legal impediments that lead most women-owned SMEs to access lower levels of credit than their male counterparts. The study recommends that banks should design lending guidelines that integrate both supply and demand factors, instead of focusing only on supply factors like project viability and collateral availability. It is also recommended that banks should develop comprehensive training programmes for borrowers about all aspects of the lending transaction in order to positively influence them. It is further recommended that there should be more consultations with loan officers and borrowers in order to develop a mutually acceptable set of lending policies. This approach, which integrates bank management, loan officers and borrowers in drawing up lending guidelines and procedures, is likely to minimise information asymmetry in SME lending decisions and create a more conducive environment for promoting credit availability to the Ugandan SME sector.

Recent research has focused more on the needs and usage of accounting information in favor of its investors. Hence, there has been less attention towards creditors’ information needs. Additionally, it has been criticized that accounting information has lost its relevance to its users (Francis &amp; Schipper 1999; Hail 2013). As Allen and Cote (2005) stated, it is hard to make any improvements to financial reporting if creditors’ decision making behavior is not well investigated. Thus, the aim of this research is to narrow the gap between studies concerning the information needs and usefulness of accounting information among creditors and investors. In addition, the companies in Sweden are financing their operation by issuing debt rather than equity, which increases the importance to consider creditors’ information needs, and how useful accounting information is to them (Billings &amp; Morton 2002; Ewing &amp; Bhatia 2012). The data was collected through questionnaire surveys which were sent out to the branch managers of the biggest commercial banks in Sweden. The questionnaire was mainly based on questions that used five point likert-scale. Additionally, a few open questions were included. Overall, the results of this thesis indicate the consistency with recent research. The importance of accounting information is significant, and practically all three main statements; balance sheet, income statement and cash flow statement, can be regarded to be complementary. An obvious difference is in the usage of financial statements compared to other information sources, as respondents claim to use accounting information nearly all the time when other sources were significantly less used.

Thesis (M.B.A)--Boston University.

Tesis para optar al grado de Magíster en Finanzas / Los Mercados Financieros son fundamentales para promover la eficiencia económica, canalizando recursos desde quienes no los utilizan de manera productiva (personas que ahorran), hacia aquellos que tienen oportunidades de inversión productiva y carecen de los recursos necesarios. Para que esta asignación de recursos sea hecha en forma eficiente debe existir simetría de información entre las partes, de manera tal que los recursos financieros de los ahorrantes sean asignados a las oportunidades de inversión más rentables, en función del riesgo que los ahorrantes están dispuestos a asumir, maximizando de esta manera la creación de valor a nivel de la economía como un todo, dada toda la información relevante disponible. Si lo anterior no se cumple, por la presencia de asimetrías de información entre las partes, el proceso de asignación de recursos se verá negativamente afectado, causando que los recursos de los ahorrantes nos sean asignados en forma eficiente a las oportunidades de inversión con el perfil riesgo/retorno esperado. Esta tesis persigue investigar el funcionamiento de cláusulas restrictivas en contratos de deuda en Chile, poniendo foco en la efectividad de las mismas en presencia de Related Lending. El uso de covenants en contratos de deuda ayuda a reducir los Problemas de Agencia al que se expone un banco, al canalizar recursos hacia un proyecto de inversión. Sin embargo, asumiendo cláusulas restrictivas bien diseñadas: ¿qué sucede cuándo el préstamo se realiza a una empresa relacionada con un directivo o accionista controlador del banco?, ¿son los covenants igualmente efectivos en reducir el riesgo moral? Existe un debate en la literatura económica respecto del impacto de los préstamos realizados a entidades relacionadas en el desarrollo del sistema bancario: I. Una perspectiva argumenta que los conflictos de interés existentes entre las partes, conducen a que el “related lending”, o también llamado “insider lending”, se transforme en un mecanismo para expropiar recursos por parte de los “insiders” (directores y/o controladores del banco), a los “outsiders” (depositantes, accionistas minoritarios y/o contribuyentes de impuestos cuando existe seguro a los depósitos). Esta visión conocida en la literatura como “looting view”, recibe considerable apoyo en la literatura de crisis financiera en países menos desarrollados, al afirmar que los incentivos de los “insiders” de expropiar a los “outsiders” son particularmente fuertes en períodos de crisis económicas, cuando los “insiders” necesitan rescatar a sus propias empresas. II. La perspectiva contraria argumenta que los préstamos a empresas relacionadas facilitan las transacciones financieras, promoviendo la eficiencia económica, al reducir asimetrías de información extremas, a menudo presentes en economías menos desarrolladas. Esta visión conocida como “Information View”, plantea que el “related lending” al solucionar las asimetrías de información existentes, crea mecanismos de monitoreo de los prestatarios por parte de los bancos, constituyéndose en motor del desarrollo económico2, en palabras del historiador económico Naomi Lamoreaux. Ambas visiones contrapuestas no solo se diferencian en términos de los posibles efectos del “related lending” en el desarrollo del sistema financiero, sino que también tienen implicancias completamente distintas en los sistemas de regulación bancarios. El “looting view” podría ser utilizado, por ejemplo, para justificar estrictas regulaciones normativas sobre las relaciones de propiedad entre los bancos y las empresas no financieras, y/o establecer máximos permitidos de préstamos bancarios a entidades relacionadas. El “information view” sugeriría por el contrario que tales restricciones regulatorias podrían ser contraproducentes, al disminuir la capacidad de los bancos de solucionar los problemas de asimetría de información entre las partes, reduciendo el riesgo de selección adversa. En esta línea, la presente investigación se organiza de la siguiente manera: En la Parte 1 se presenta el marco teórico que sirvió de base para la realización de la investigación, donde se revisan los objetivos económicos que persigue la estructuración de cláusulas restrictivas en contratos de deuda, el impacto de las regulaciones legales sobre accionistas y tenedores de deuda en la estructuración de los covenants, la evidencia empírica observada en relación a las renegociaciones de cláusulas restrictivas y el estado del arte en Related Lending, con el propósito de entender bajo qué circunstancias los préstamos realizados a entidades relacionadas afectan positiva o negativamente el desarrollo del sistema financiero, impactando en la misma dirección la eficiencia económica. En la Parte 2, como caso ilustrativo que permita plantear ciertas hipótesis de trabajo de lo que sucede en Chile, se presenta el caso SMU ‐ CorpBanca, con foco en los años 2012 al 2014, de manera tal de entender si el uso de Cláusulas Restrictivas asociados a los préstamos bancarios de SMU y las líneas de bonos emitidos por SMU, fue suficiente para eliminar los problemas de agencia al que están expuestos los depositantes y accionistas minoritarios del banco. De la misma forma, se analizan las implicancias que estos covenants tienen en el comportamiento de CorpBanca, grupo controlador de la cadena supermercadista. Las fuentes de información fueron los estados financieros enviados por SMU y Corpbanca a la SVS, así como también toda la información de prensa disponible. Integrando el marco teórico expuesto con los hallazgos obtenidos de la investigación del caso SMU – Corpbanca, llegamos a la Discusión Final, presentada en la Parte 3, con información relevante para postular hipótesis de trabajo que dan posibles respuestas al objetivo perseguido por esta investigación. Por último, en la Parte 4, se presenta la Bibliografía con el detalle de los papers y libros consultados, la información financiera utilizada, así como también la información de prensa que aportó algunos antecedentes relevantes para analizar el caso de la cadena supermercadista y su grupo controlador.

This dissertation contains three essays on topics including crime, credit constraints, education, athletics and health. Tying the works together is a set of empirical tools that have come to define the field of labor economics and the pursuit of causal inference. Chapter II contains an analysis of the effects of a school-based incentive program on children's exercise habits. The program offers children an opportunity to win prizes if they walk or bike to school during prize periods. I use daily child-level data and individual fixed effects models to measure the impact of the prizes by comparing behavior during prize periods with behavior during non-prize periods. Variation in the timing of prize periods across different schools allows me to estimate models with calendar-date fixed effects to control for day-specific attributes, such as weather and proximity to holidays. In Chapter III, I present evidence of the causal effects on crime of access to small, high cost, short term consumer credit, known as payday lending. Using within-state geographic as well as inter-temporal variation in access to payday loans, I estimate the effect of access to payday lending on all types of crime. I find a substantial effect only for financially motivated offenses, with access to payday lending leading to approximately five additional arrests per 100,000 residents monthly. The estimated effects are concentrated in larceny, fraud, and forgery. The final chapter turns back to education to assess high school athletics' role in affecting athletes' attendance patterns. The key result that emerges from the analysis is that in-season athletes miss significantly less school relative to athletes out-of-season. School absences in boys decline by nearly 8% as a result of being in-season, though the effects are much larger for black boys, particularly with respect to unexcused absences. Paying careful attention to issues of identification, this dissertation presents three essays contributing to the literature broadly categorized as labor economics. Each seeks to understand the role of changing incentives and opportunities on individuals' decision making processes, in order to inform policy makers wishing to craft effective public policies. This dissertation includes previously published co-authored material. / 10000-01-01

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ABSTRACT This paper examines the relationship between microfinance institutions and the poor in Beira-Mozambique and the benefits accruing from the established relationships. The study focuses on access to credit and the promotion of entrepreneurship among the target group. The study concludes that the institutions and the target group, especially active clients, treasure close long-term relationships and strive to build and sustain such relationships. However, the relationships have thus far had only a limited, albeit promising, impact on the sustainability of the institutions, access to credit and the promotion of entrepreneurship among the target group. Another major finding is that clients already in the credit relationship do not have serious problems accessing credit upon successful repayment of previous loans. However, those seeking to enter credit relationships face strict entry requirements. In short entering credit relationships is more difficult than staying in them.