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Abstract. Structured finance boomed during the run-up to the 2008 financial crisis. Highly rated, structured securities offered higher yield than other similarly rated bonds because of their concentration of systematic [...]

We analyze the bank supply of credit under the Paycheck Protection Program (PPP). The literature emphasizes relationships as a means to improve lender information, which helps banks manage credit risk. Despite imposing no risk, however, the PPP supply reflects traditional measures of relationship lending: decreasing in bank size and increasing in prior experience, commitment lending, and core deposits. Our results suggest a new benefit of bank relationships: They help firms access government-subsidized lending. Consistent with this benefit, we show that the bank PPP supply, based on the structure of the local banking sector, alleviates increases in unemployment. [ABSTRACT FROM AUTHOR]

We test whether measures of influence on regulators affect stress-test outcomes. The large trading banks—those most plausibly Too Big to Fail—face the toughest tests. Supervisory stress tests have a greater effect on large trading banks' portfolios; the large banks respond by making more conservative (initial) capital plans; and, despite their more conservative capital plans, the large banks still fail their tests more frequently than other banks. In contrast, while we find little evidence that political or regulatory connections affect the quantitative element of the stress tests, these connected banks do face less scrutiny under its qualitative dimension. [ABSTRACT FROM AUTHOR]

To purchase or authenticate to the full-text of this article, please visit this link: http://dx.doi.org/10.1111/j.1540-6261.2007.01293.x Byline: JUN QIAN, PHILIP E. STRAHAN (*) Abstract: ABSTRACT Legal and institutional differences shape the ownership and terms of bank loans across the world. We show that under strong creditor protection, loans have more concentrated ownership, longer maturities, and lower interest rates. Moreover, the impact of creditor rights on loans depends on borrower characteristics such as the size and tangibility of assets. Foreign banks appear especially sensitive to the legal and institutional environment, with their ownership declining relative to domestic banks as creditor protection falls. Our multidimensional empirical model paints a more complete picture of how financial contracts respond to the legal and institutional environment than existing studies. Article note: (*) Both authors are at the Carroll School of Management, Boston College and are affiliated with the Wharton Financial Institutions Center; Strahan is also affiliated with the NBER. We appreciate helpful comments from an anonymous referee and an associate editor, Franklin Allen, Thorsten Beck, Cliff Holderness, Ross Levine, Katharina Pistor, Andrei Shleifer, Amir Sufi, Bernard Yeung, and seminar participants at the Bank of England, Boston College, Bundesbank, Federal Deposit Insurance Corporation, the Federal Reserve Banks of New York and Philadelphia, Harvard, INSEAD, London Business School, Rice, Texas A&M, the American Finance Association meetings in Philadelphia, and the Financial Intermediation Research Society meetings in Capri, Italy. Geraldine Hough, Frank Corrado, Jean-Marc Donics, Mehrun Etebari, Daniel Yang, and Zhe Xu provided excellent research assistance. We gratefully acknowledge Florencio Lopez-de-Silanes and Richard Cantor for providing data on creditor rights and sovereign debt ratings, and Boston College for financial support. The authors are responsible for all remaining errors.