Pub Date : 2026-01-01Epub Date: 2026-02-24DOI: 10.1016/j.jfi.2026.101194
Vicente J. Bermejo , Antonino Emanuele Rizzo , Mohammed Zakriya
We study the relative importance of institutional investors and managers for corporate ESG policies. We find that investor effects are the strongest predictors of ESG performance. This result holds across individual ESG dimensions, and it is particularly pronounced for the environmental dimension. Long-term investors and those headquartered in Democratic-leaning states are most strongly associated with higher ESG performance. Additional analyses indicate that both investor selection and influence channels are at play. Overall, our findings highlight the central role of institutional investors for corporate ESG outcomes.
{"title":"What drives corporate ESG? Disentangling the importance of investors and managers","authors":"Vicente J. Bermejo , Antonino Emanuele Rizzo , Mohammed Zakriya","doi":"10.1016/j.jfi.2026.101194","DOIUrl":"10.1016/j.jfi.2026.101194","url":null,"abstract":"<div><div>We study the relative importance of institutional investors and managers for corporate ESG policies. We find that investor effects are the strongest predictors of ESG performance. This result holds across individual ESG dimensions, and it is particularly pronounced for the environmental dimension. Long-term investors and those headquartered in Democratic-leaning states are most strongly associated with higher ESG performance. Additional analyses indicate that both investor selection and influence channels are at play. Overall, our findings highlight the central role of institutional investors for corporate ESG outcomes.</div></div>","PeriodicalId":51421,"journal":{"name":"Journal of Financial Intermediation","volume":"65 ","pages":"Article 101194"},"PeriodicalIF":3.7,"publicationDate":"2026-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"147421058","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2026-01-01Epub Date: 2026-02-27DOI: 10.1016/j.jfi.2026.101196
Kumar Rishabh
Open Banking initiatives aim to make payment data interoperable across institutions. I examine the value of this interoperability in lending using data that link borrowers’ payment histories with non-bank small-business loans in India. Payment data improve lenders’ ability to screen and monitor loans beyond traditional sources, including credit bureaus. These information sources are complementary because they specialize in different determinants of repayment. Subsample analysis shows that payment histories primarily reflect real-time repayment ability, while a natural experiment removing borrower discretion confirms that credit bureaus primarily measure willingness to repay. Shifting to payment-based screening benefits most borrowers but disadvantages those with poor credit scores and thin payment records, highlighting distributional trade-offs in Open Banking implementation.
{"title":"Beyond the bureau: Interoperable payment data for loan screening and monitoring","authors":"Kumar Rishabh","doi":"10.1016/j.jfi.2026.101196","DOIUrl":"10.1016/j.jfi.2026.101196","url":null,"abstract":"<div><div>Open Banking initiatives aim to make payment data interoperable across institutions. I examine the value of this interoperability in lending using data that link borrowers’ payment histories with non-bank small-business loans in India. Payment data improve lenders’ ability to screen and monitor loans beyond traditional sources, including credit bureaus. These information sources are complementary because they specialize in different determinants of repayment. Subsample analysis shows that payment histories primarily reflect real-time repayment ability, while a natural experiment removing borrower discretion confirms that credit bureaus primarily measure willingness to repay. Shifting to payment-based screening benefits most borrowers but disadvantages those with poor credit scores and thin payment records, highlighting distributional trade-offs in Open Banking implementation.</div></div>","PeriodicalId":51421,"journal":{"name":"Journal of Financial Intermediation","volume":"65 ","pages":"Article 101196"},"PeriodicalIF":3.7,"publicationDate":"2026-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"147421921","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2026-01-01Epub Date: 2025-12-30DOI: 10.1016/j.jfi.2025.101193
Angela Gallo , Min Park
We document a significant role for nonbanks in financing the green transition following the Paris Agreement, primarily through lending partnerships with banks. Using textual analysis to identify green loans, we show that nonbanks participate in a greater number of green syndicated loans and commit larger amounts in response to corporate demand for green financing. Such nonbank investment in green loans is associated with more favorable loan terms and is consistent with a nonbank-led expansion in credit supply rather than bank-driven risk offloading. Nonbank investment is highly sensitive to policy signals, suggesting that regulatory transition risk is a key driver. Overall, our findings show the potential for nonbanks to support the transition but only under credible political commitment to climate goals.
{"title":"Financing green transition: The role of bank-nonbank partnerships","authors":"Angela Gallo , Min Park","doi":"10.1016/j.jfi.2025.101193","DOIUrl":"10.1016/j.jfi.2025.101193","url":null,"abstract":"<div><div>We document a significant role for nonbanks in financing the green transition following the Paris Agreement, primarily through lending partnerships with banks. Using textual analysis to identify green loans, we show that nonbanks participate in a greater number of green syndicated loans and commit larger amounts in response to corporate demand for green financing. Such nonbank investment in green loans is associated with more favorable loan terms and is consistent with a nonbank-led expansion in credit supply rather than bank-driven risk offloading. Nonbank investment is highly sensitive to policy signals, suggesting that regulatory transition risk is a key driver. Overall, our findings show the potential for nonbanks to support the transition but only under credible political commitment to climate goals.</div></div>","PeriodicalId":51421,"journal":{"name":"Journal of Financial Intermediation","volume":"65 ","pages":"Article 101193"},"PeriodicalIF":3.7,"publicationDate":"2026-01-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145871731","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-10-01Epub Date: 2025-11-04DOI: 10.1016/j.jfi.2025.101181
William D. Larson , Christos A. Makridis , Chad A. Redmer
We estimate the causal effects of changing borrower expectations on the execution of options embedded in mortgage contracts during the COVID-19 pandemic. Borrowers who were most optimistic about future appreciation at the onset of the pandemic quickly entered forbearance, but then exited as expectations improved. However, borrowers who expected unemployment entered and remained in forbearance throughout the weak labor market. We also find expectations are determined via both local experiences and social networks, and correlate with both leverage and debt burdens. Overall, these findings highlight an important source of private information and adverse selection in the mortgage market.
{"title":"Borrower expectations and mortgage performance: Evidence from the COVID-19 pandemic","authors":"William D. Larson , Christos A. Makridis , Chad A. Redmer","doi":"10.1016/j.jfi.2025.101181","DOIUrl":"10.1016/j.jfi.2025.101181","url":null,"abstract":"<div><div>We estimate the causal effects of changing borrower expectations on the execution of options embedded in mortgage contracts during the COVID-19 pandemic. Borrowers who were most optimistic about future appreciation at the onset of the pandemic quickly entered forbearance, but then exited as expectations improved. However, borrowers who expected unemployment entered and remained in forbearance throughout the weak labor market. We also find expectations are determined via both local experiences and social networks, and correlate with both leverage and debt burdens. Overall, these findings highlight an important source of private information and adverse selection in the mortgage market.</div></div>","PeriodicalId":51421,"journal":{"name":"Journal of Financial Intermediation","volume":"64 ","pages":"Article 101181"},"PeriodicalIF":3.7,"publicationDate":"2025-10-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145466149","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-10-01Epub Date: 2025-10-25DOI: 10.1016/j.jfi.2025.101180
Jean Helwege , Xin Liu
Using earnings conference calls, we investigate banks’ views of the Troubled Asset Relief Program (TARP) to understand why TARP generated so few loans. We find that banks generally regarded TARP favorably and many mentioned using TARP funds to make loans. However, actual loan growth fell well below expectations based on prior capital ratios, even among banks that publicly committed to lending. Other banks highlighted that the funds would improve their capital ratios. We show that these perspectives are largely unrelated to banks’ ex-ante financial characteristics, but instead reflect the evolving conditions during the crisis period. These shifts are consistent with a large decline in the fraction of banks that commented on the favorable pricing of the preferred stock over time. Our findings suggest that banks primarily used TARP funds to strengthen capital ratios, partly driven by CEO career concerns. Weak loan demand and evolving market conditions also contributed to the sluggish loan growth following the TARP injections.
{"title":"TARP from the banks’ perspective: Evidence from conference calls","authors":"Jean Helwege , Xin Liu","doi":"10.1016/j.jfi.2025.101180","DOIUrl":"10.1016/j.jfi.2025.101180","url":null,"abstract":"<div><div>Using earnings conference calls, we investigate banks’ views of the Troubled Asset Relief Program (TARP) to understand why TARP generated so few loans. We find that banks generally regarded TARP favorably and many mentioned using TARP funds to make loans. However, actual loan growth fell well below expectations based on prior capital ratios, even among banks that publicly committed to lending. Other banks highlighted that the funds would improve their capital ratios. We show that these perspectives are largely unrelated to banks’ ex-ante financial characteristics, but instead reflect the evolving conditions during the crisis period. These shifts are consistent with a large decline in the fraction of banks that commented on the favorable pricing of the preferred stock over time. Our findings suggest that banks primarily used TARP funds to strengthen capital ratios, partly driven by CEO career concerns. Weak loan demand and evolving market conditions also contributed to the sluggish loan growth following the TARP injections.</div></div>","PeriodicalId":51421,"journal":{"name":"Journal of Financial Intermediation","volume":"64 ","pages":"Article 101180"},"PeriodicalIF":3.7,"publicationDate":"2025-10-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145466150","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-10-01Epub Date: 2025-09-25DOI: 10.1016/j.jfi.2025.101178
Yaniv Grinstein , Yelena Larkin
Banks face pressure to integrate a wider range of risks into lending decisions, including both traditional product-market risks and the increasingly important environmental risk. Yet how these two types of risk interact remains unclear. We show that production technology is pivotal in shaping the impact of product-market competition on environmental risk. Focusing on the restructuring of the US electric utility industry, which introduced product-market competition into a highly polluting sector, we find that technological capacity is key. When technology enables cost-saving production decisions that also improve environmental performance, competition reduces environmental footprint. Otherwise, it exacerbates it. These findings suggest that lenders must assess not only individual risk factors of borrowers but also their potential interactions, with firms’ technological capacity playing a crucial role.
{"title":"Corporate environmental footprint and product market competition","authors":"Yaniv Grinstein , Yelena Larkin","doi":"10.1016/j.jfi.2025.101178","DOIUrl":"10.1016/j.jfi.2025.101178","url":null,"abstract":"<div><div>Banks face pressure to integrate a wider range of risks into lending decisions, including both traditional product-market risks and the increasingly important environmental risk. Yet how these two types of risk interact remains unclear. We show that production technology is pivotal in shaping the impact of product-market competition on environmental risk. Focusing on the restructuring of the US electric utility industry, which introduced product-market competition into a highly polluting sector, we find that technological capacity is key. When technology enables cost-saving production decisions that also improve environmental performance, competition reduces environmental footprint. Otherwise, it exacerbates it. These findings suggest that lenders must assess not only individual risk factors of borrowers but also their potential interactions, with firms’ technological capacity playing a crucial role.</div></div>","PeriodicalId":51421,"journal":{"name":"Journal of Financial Intermediation","volume":"64 ","pages":"Article 101178"},"PeriodicalIF":3.7,"publicationDate":"2025-10-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145270411","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-10-01Epub Date: 2025-09-09DOI: 10.1016/j.jfi.2025.101179
Gillian Brunet , Eric Hilt , Matthew Jaremski
The Liberty Bond drives of World War I were nation-wide interventions aimed at increasing financial literacy and associating bond ownership with patriotism. Using data from the first year of the Survey of Consumer Finances, 1947, through 1971, we investigate whether exposure to the drives shaped investing behavior over the long run. We find that households residing in counties that had high Liberty Bond participation had greater stock and bond ownership rates in later decades, and held more favorable opinions towards retirement saving and stock investment. These effects are present only among cohorts actually exposed to the bond drives, and not among younger cohorts in the same counties, and are robust to an instrumental variables specification that takes advantage of differences in the way the bond drives were conducted. Our estimates imply that household stock ownership rates would have been about 21 % lower in the late 1960s if the bond drives had not been conducted.
{"title":"‘Invest!’: Liberty bonds and stock ownership over the twentieth century","authors":"Gillian Brunet , Eric Hilt , Matthew Jaremski","doi":"10.1016/j.jfi.2025.101179","DOIUrl":"10.1016/j.jfi.2025.101179","url":null,"abstract":"<div><div>The Liberty Bond drives of World War I were nation-wide interventions aimed at increasing financial literacy and associating bond ownership with patriotism. Using data from the first year of the Survey of Consumer Finances, 1947, through 1971, we investigate whether exposure to the drives shaped investing behavior over the long run. We find that households residing in counties that had high Liberty Bond participation had greater stock and bond ownership rates in later decades, and held more favorable opinions towards retirement saving and stock investment. These effects are present only among cohorts actually exposed to the bond drives, and not among younger cohorts in the same counties, and are robust to an instrumental variables specification that takes advantage of differences in the way the bond drives were conducted. Our estimates imply that household stock ownership rates would have been about 21 % lower in the late 1960s if the bond drives had not been conducted.</div></div>","PeriodicalId":51421,"journal":{"name":"Journal of Financial Intermediation","volume":"64 ","pages":"Article 101179"},"PeriodicalIF":3.7,"publicationDate":"2025-10-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145195803","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-10-01Epub Date: 2025-11-10DOI: 10.1016/j.jfi.2025.101183
Stefan Gissler , Marco Macchiavelli , Borghan Narajabad
To provide a safe haven for investors at all times, government money market funds face several challenges, which received little attention in prior studies. When Treasury bills are scarce, they need a flexible supplier of safe assets as a substitute for T-bills. The challenge compounds when government funds also experience large inflows. Conversely, when T-bills are abundant but with long maturities, government funds need complements to T-bills to manage interest rate risk. Federal Home Loan Banks satisfy both needs, offering large amounts of safe assets on short notice and with flexible repricing which allows funds to manage interest rate risk.
{"title":"Providing safety in a rush: How did shadow banks respond to a $1 trillion shock?","authors":"Stefan Gissler , Marco Macchiavelli , Borghan Narajabad","doi":"10.1016/j.jfi.2025.101183","DOIUrl":"10.1016/j.jfi.2025.101183","url":null,"abstract":"<div><div>To provide a safe haven for investors at all times, government money market funds face several challenges, which received little attention in prior studies. When Treasury bills are scarce, they need a flexible supplier of safe assets as a substitute for T-bills. The challenge compounds when government funds also experience large inflows. Conversely, when T-bills are abundant but with long maturities, government funds need complements to T-bills to manage interest rate risk. Federal Home Loan Banks satisfy both needs, offering large amounts of safe assets on short notice and with flexible repricing which allows funds to manage interest rate risk.</div></div>","PeriodicalId":51421,"journal":{"name":"Journal of Financial Intermediation","volume":"64 ","pages":"Article 101183"},"PeriodicalIF":3.7,"publicationDate":"2025-10-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145520231","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-10-01Epub Date: 2025-11-01DOI: 10.1016/j.jfi.2025.101182
Martin R. Goetz , Luc Laeven , Ross Levine
We construct a novel panel of insider ownership for roughly 600 U.S. bank holding companies from 2003 to 2014 to test whether ownership structure shaped recapitalizations around the Global Financial Crisis (GFC). Insider ownership shows no discrete shift around the GFC. Using a difference-in-differences design with BHC and time fixed effects, we find that, after Q3 2008, banks with higher pre-crisis insider stakes issued significantly less common equity than otherwise similar peers. This effect is more pronounced where insiders enjoy greater private benefits of control, as proxied by insider lending and earnings opacity—consistent with dilution reluctance as the mechanism. The findings hold in propensity score matched regressions and when employing instrumental variables for insider ownership. These results reveal that ownership structure affects banks’ equity issuances in crises, underscoring the importance of accounting for ownership structure in bank stress tests and capital-regulation frameworks.
{"title":"Do bank insiders impede equity issuances?","authors":"Martin R. Goetz , Luc Laeven , Ross Levine","doi":"10.1016/j.jfi.2025.101182","DOIUrl":"10.1016/j.jfi.2025.101182","url":null,"abstract":"<div><div>We construct a novel panel of insider ownership for roughly 600 U.S. bank holding companies from 2003 to 2014 to test whether ownership structure shaped recapitalizations around the Global Financial Crisis (GFC). Insider ownership shows no discrete shift around the GFC. Using a difference-in-differences design with BHC and time fixed effects, we find that, after Q3 2008, banks with higher pre-crisis insider stakes issued significantly less common equity than otherwise similar peers. This effect is more pronounced where insiders enjoy greater private benefits of control, as proxied by insider lending and earnings opacity—consistent with dilution reluctance as the mechanism. The findings hold in propensity score matched regressions and when employing instrumental variables for insider ownership. These results reveal that ownership structure affects banks’ equity issuances in crises, underscoring the importance of accounting for ownership structure in bank stress tests and capital-regulation frameworks.</div></div>","PeriodicalId":51421,"journal":{"name":"Journal of Financial Intermediation","volume":"64 ","pages":"Article 101182"},"PeriodicalIF":3.7,"publicationDate":"2025-10-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145466148","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2025-10-01Epub Date: 2025-07-25DOI: 10.1016/j.jfi.2025.101168
Paolo Fulghieri , Anjan Thakor
This paper provides a summary of the five papers published in this special issue. It also indicates the themes that connect these papers and highlights the major insights uncovered by the research. The overall message is that banks adapt in often-unexpected ways to the dynamic nature of regulation and the complex interaction of regulation and the evolving market forces that spawn frontier risks and amplify traditional risks, thereby creating daunting regulatory challenges.
{"title":"Frontier risks, financial innovation and prudential regulation of banks: Introduction","authors":"Paolo Fulghieri , Anjan Thakor","doi":"10.1016/j.jfi.2025.101168","DOIUrl":"10.1016/j.jfi.2025.101168","url":null,"abstract":"<div><div>This paper provides a summary of the five papers published in this special issue. It also indicates the themes that connect these papers and highlights the major insights uncovered by the research. The overall message is that banks adapt in often-unexpected ways to the dynamic nature of regulation and the complex interaction of regulation and the evolving market forces that spawn frontier risks and amplify traditional risks, thereby creating daunting regulatory challenges.</div></div>","PeriodicalId":51421,"journal":{"name":"Journal of Financial Intermediation","volume":"64 ","pages":"Article 101168"},"PeriodicalIF":3.7,"publicationDate":"2025-10-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"145579515","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":1,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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