This article examines the practice of " tying, " which occurs when an underwriter lends to an issuer around the time of a public securities offering in order to secure underwriting business. We examine the following questions: (i) Does the issuing firm benefit from tying practices? (ii) If so, what is the source of these benefits? Why do underwriters tie lending to underwriting? (iii) How has t...

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In this paper, we formulate a behavioral model under uncertainty to estimate the total factor productivity in the Taiwan banking industry. In particular, the paper provides a model based on the safety-first rule under uncertainty to measure the risk premium in banking operations that are subject to loan default and other investment risks. Using panel data of forty banks in 1981-1996, a translog...

Previous research finds some evidence that analysts affiliated with equity underwriters issue more optimistic earnings growth forecasts and optimistic recommendations of client stock than unaffiliated analysts. Unfortunately, these studies are unable to discriminate between three competing hypotheses for the apparent optimism. Under the bribery hypothesis, underwriting clients, with the promise...

Traditionally, the literature on financial intermediation and credit channels, especially credit crunches, emphasized the relation between banks and entrepreneurs requiring credit, neglecting the funding of banks. With this paper, we want to be much more precise in this respect and study the impact of funding on credit. Indeed, regulation that has become world wide with the Basle Accord puts li...

Recent decades witnessed a trend whereby private markets retreated from financing the real economy, whilst simultaneously the real economy itself became increasingly financialized. This trend resulted in public finance becoming more important for capital investments. Within this context, the paper focuses on the roles played by a particular source of public finance: state investment banks (SIBs...

In this study, we investigate and discuss IT investment and related issues in the Japanese banking industry. And we insist that banks should take account of technology trend as one of heavy IT users and switch long-term-strategy and IT-migration-strategy appropriately in order to make the best of IT. First of all, we show some back grounds of Japanese banking industry and IT revolution. Next, w...

A number of studies suggest that banks involved in mergers and acquisitions tend to reallocate their loan portfolio generating welfare effects for borrowers of the just-merged institutions. Gains from bank mergers may be offset by increases in market power and negative informational effects on the availability of credit of borrowers that depend on relationship-based lending. On the other hand, ...

Limited liability and asymmetric information between an investment bank and its lenders provide an incentive for a bank to undercapitalise and finance overly risky business projects. To counter this market failure, national governments have imposed solvency constraints on banks. However, these constraints may not survive in systems competition, as systems competition is likely to suffer from th...