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3 results on '"OLIVIERO, Tommaso"'

1. Low price-to-book ratios and bank dividend payouts: economic policy implications.

Author

Gambacorta, Leonardo, Oliviero, Tommaso, and Shin, Hyun Song

Subjects
ECONOMIC impact, ECONOMIC policy, BANK loans, COVID-19 pandemic, DIVIDENDS
Abstract

Banks with a low price-to-book ratio (PBR) have a greater propensity to pay out dividends. This propensity is especially marked for banks with a PBR below a threshold of 0.7, a situation that characterizes many banks in recent years, especially in the euro area. We demonstrate these features using data for 271 advanced economy banks in 29 jurisdictions. Dividend payouts as a proportion of profits rise in a non-linear way as the PBR falls below 0.7. In a hypothetical exercise with fixed balance sheet ratios, we find that a suspension of bank dividends in 2020 during the COVID-19 pandemic would have added, under different stress scenarios and parametrizations, an additional US$0.2–1.1 trillion of bank lending capacity in our sample, equivalent to 0.3–1.6% of total GDP. [ABSTRACT FROM AUTHOR]

Published
2023
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2. Family Firms and the Agency Cost of Debt: The role of soft information during a crisis

Author

D’AURIZIO, Leandro, OLIVIERO, Tommaso, and ROMANO, Livio

Subjects
Relationship lending, Soft information, C81, Financial crisis, E44, G21, G32, Family Firms, Credit supply, D22
Abstract

In this paper we study how access to bank lending during the recent financial crisis differed between family and non-family firms. Our theoretical prediction is that the presence of a family block-holder in the company attenuated the agency conflict in the borrower-lender relation, because of the higher non-monetary cost of default entailed in this type of corporate ownership structure. Because this information is to a large extent soft, we further investigate the interaction between the family firm status and the screening technology adopted by banks. Using highly detailed data referred to Italy, we exploit the change in the credit allocation following Lehman Brothers’ bankruptcy. We find that family firms experienced a contraction in granted credit lower than non-family firms. Results are robust to ex-ante differences between the two types of firms and to bank-specific shocks. In line with our prior, banks that increased the role of soft information in their lending practices reallocated credit towards family firms.

Published
2012

3. Family firms, soft information and bank lending in a financial crisis

Author

Livio Romano, Leandro D'Aurizio, Tommaso Oliviero, D'Aurizio, Leandro, Oliviero, Tommaso, and Romano, Livio

Subjects
jel:C81, Economics and Econometrics, Economics and Econometric, Exploit, Family firms, Financial crisis, Soft information, Bank lending, Strategy and Management, Control (management), Principal–agent problem, jel:D22, jel:E44, Monetary economics, Detailed data, jel:G21, Soft information, jel:L26, Bank lending, G32, Business and International Management, Financial crisi, jel:G32, Family firm, Strategy and Management1409 Tourism, Leisure and Hospitality Management, Incentive, Financial crisis, G21, Business, Finance, D22
Abstract

This paper studies how access to bank lending differed between family and non-family firms in the 2007-2009 financial crisis. The theoretical prediction is that family block-holders’ incentive structure results in lower agency conflict in the borrower-lender relationship. Using highly detailed data on bank-firm relations, we exploit the reduction in bank lending in Italy following the crisis in October 2008. We find statistically and economically significant evidence that the contraction in credit for family firms was smaller than that for non-family firms. Results are robust to ex-ante observable differences between the two types of firms and to time-varying bank fixed effects. We further show that the difference in the amount of credit granted to family and non-family firms is related to an increased role for soft information in Italian banks’ operations, following the Lehman Brothers’ failure. Finally, by identifying a match between those banks and family firms, we can control for time-varying unobserved heterogeneity among the firms and validate the hypothesis that our results are supply driven.

Published
2015

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