Publications

July 2022
Article

Countercyclical Prudential Buffers and Bank Risk-taking

By: Manuel Illueca, Lars Norden, Joseph Pacelli and Gregory F. Udell

We investigate the effects of countercyclical prudential buffers on bank risk-taking. We exploit the introduction of dynamic loan loss provisioning in Spain, mandating that banks use historical average loss rates in their estimation of loan loss provisions. We find... View Details

Keywords: Banks; Bank Regulation; Macroprudential Policies; Bank Lending; Loan Loss Provisioning; Risk Taking; Banks and Banking; Financing and Loans; Governing Rules, Regulations, and Reforms; Risk and Uncertainty

Find at Harvard

December 2002 (Revised January 2004)
Case

Basel II: Assessing the Default and Loss Characteristics of Project Finance Loans (A)

By: Benjamin C. Esty and Aldo Sesia

In June 1999, the Basel Committee on Banking Supervision announced plans to revise the capital standards for banks. The Basel Committee believed that project loans were significantly riskier than corporate loans and, therefore, warranted higher capital charges under... View Details

Keywords: Risk and Uncertainty; Project Finance; Financing and Loans; Projects; Standards; Banks and Banking; Banking Industry

December 2023
Supplement

Accounting for Loan Losses at JPMorgan Chase: Predicting Credit Costs

By: Jonas Heese and Jung Koo Kang

October 2023
Teaching Note

Accounting for Loan Losses at JPMorgan Chase: Predicting Credit Costs

By: Jonas Heese and Jung Koo Kang

Teaching Note for HBS Case No. 123-042. View Details

November 2002
Supplement

Basel II: Assessing the Default and Loss Characterisrics of Project Finance Loans

By: Benjamin C. Esty and Aldo Sesia

Spreadsheet to (9-203-035). Download only. View Details

Keywords: Project Finance; Financing and Loans

December 2002 (Revised June 2003)
Teaching Note

Basel II: Assessing the Default and Loss Characteristics of Project Finance Loans (TN)

By: Benjamin C. Esty and Aldo Sesia

Teaching Note for (9-203-035). View Details

Keywords: Project Finance; Financing and Loans

January 2004 (Revised April 2005)
Case

Basel II: Assessing the Default and Loss Characteristics of Project Finance Loans (B)

By: Benjamin C. Esty and Aldo Sesia

Supplements the (A) case. View Details

Keywords: Financial Services Industry

2012
Chapter

The Availability and Utilization of 401(k) Loans

By: John Beshears, James J. Choi, David Laibson and Brigitte C. Madrian

We document the loan provisions in 401(k) savings plans and how participants use 401(k) loans. Although only about 22% of savings plan participants who are allowed to borrow from their 401(k) have such a loan at any given point in time, almost half had used a 401(k)... View Details

Keywords: Decision Choices and Conditions; Personal Finance; Retirement; Financing and Loans; Microeconomics

11 Feb 2015
Research & Ideas

Politicians Benefited From Using Toxic Loans

Saint-Etienne saw the interest rates on one of its major loans rise from 4 percent to 24 percent in 2010, due to the depreciation of the pound sterling. In total, losses on toxic View Details

Keywords: by Carmen Nobel; Financial Services

Getting the Most Out of Financial Incentives for Weight Loss

The use of employer-sponsored, incentive-based programs for weight loss is growing. This growth is likely to accelerate in the coming years due to a provision in the Patient Protection and Affordable Care Act, which allows employers to use a greater proportion of... View Details

23 Apr 2020
Research & Ideas

This Crisis Loan Program Preserved Jobs—and Made Money

As the US Congress prepares to replenish its Paycheck Protection Program for small businesses, questions still linger: Do guaranteed loans for small businesses work in the long term? Who wins? Employees? Businesses? Taxpayers? The answer appears to be yes for all... View Details

Keywords: by Rachel Layne; Financial Services

22 May 2019
Research & Ideas

Forgiving Student Loan Debt Leads to Better Jobs, Stronger Consumers

paying interest, if a job is lost. Private student loans often don’t offer these protections, and many people end up accumulating enough debt that their earnings, particularly in lower-paying jobs, can’t cover their repayments. “It’s... View Details

Keywords: by Dina Gerdeman

13 Feb 2013
Research & Ideas

5 Weight Loss Tips From Behavioral Economists

day. If participants reached their weight loss goal by the end of the trial, they got to keep the money, thus doubling their deposits. But if they failed to reach the goal, they lost all the cash. Meanwhile, a control group of... View Details

Keywords: by Carmen Nobel

2016
Working Paper

Capital Requirements, Risk Choice, and Liquidity Provision in a Business Cycle Model

By: Juliane Begenau

This paper develops a quantitative dynamic general equilibrium model in which households' preferences for safe and liquid assets constitute a violation of Modigliani and Miller. I show that the scarcity of these coveted assets created by increased bank capital... View Details

Keywords: Capital Requirement; Bank Regulation; Demand For Safe Assets; Business Cycles; Bank Lending; Risk Management; Financial Liquidity; Financing and Loans; Capital; Banks and Banking

SSRN

Working Paper

Covenant-Light Contracts and Creditor Coordination

By: Bo Becker and Victoria Ivashina

In 2015, 70% of newly issued leveraged loans had weaker enforcement features, called covenant-light or "cov-lite"; this is nearly a three-time increase in cov-lite issuance compared to a previous peak in 2007. We evaluate whether this development can be attributed to... View Details

Keywords: Credit Cycles; Loan Contracts; Debt Covenants; Contracts; Financing and Loans; Credit; Borrowing and Debt

SSRN

September 2012 (Revised February 2013)
Case

micro Home Solutions: A Social Housing Initiative in India

By: William R. Kerr and Alexis Brownell

mHS is a social enterprise for the provision of affordable housing in India. After India's microfinance industry collapses, mHS needs to reposition itself for continued operations and long-term growth. View Details

Keywords: India; Loans; Development; Micro Finance; Entrepreneurship; Housing; Social Enterprise; Poverty; India

Forthcoming
Article

Second Chance: Life with Less Student Debt

By: Marco Di Maggio, Ankit Kalda and Vincent Yao

This paper examines the effect of student debt relief on individual credit and labor market outcomes. We exploit an episode of plausibly random debt discharge due to the loss of paperwork for thousands of borrowers to examine the effects of private student debt relief... View Details

Keywords: Student Debt; Private Student Loans; Legal Settlement; Mobility; Debt Collection; Debt Relief; Personal Finance; Borrowing and Debt; Outcome or Result

SSRN

September 1991 (Revised April 1994)
Case

First National Bank Corp. (A)

First National Bank Corp., a major regional bank in the Northeast, must decide how large a provision for credit losses to accrue in its 1990 financial statements. The recession in New England has caused serious problems in its loan portfolio. View Details

Keywords: Financing and Loans; Financial Statements; Banks and Banking; Banking Industry; Northeastern United States