Research

Research Interests

Bank accounting; financial reporting by financial institutions; transparency and financial stability.

Working papers

"Do depositors monitor banks using accounting information? Evidence from the EDGAR log file"  

Abstract: This paper investigates whether depositors monitor banks using accounting information. I develop a novel measure of depositor monitoring based on downloads of banks’ SEC filings traced through the EDGAR log file. Descriptive evidence shows that depositors are the primary users of banks’ f ilings. Moreover, I find that higher depositor monitoring through accounting disclosures (Form 10-K and 10-Q) is associated with a decline in future uninsured deposits, but only when the filings reveal negative information about bank performance. This finding is consistent with the theoretical prediction that depositors are primarily concerned with downside risks and that information about bank fundamentals influences their withdrawal decisions. In addition, I document that the role of depositor monitoring evolved during the Global Financial Crisis, shifting across different phases of the crisis in response to depositors’ changing incentives before and after government interventions. Overall, this study provides direct, large-scale evidence on depositor monitoring via accounting disclosures and its implications for uninsured deposit flows and financial stability  

"The private information in public debt contracts"  (coauthored with Paul Demeré and Francesco Grossetti)

Abstract: We examine whether the contractual terms and language used in loan agreements contain prediction-relevant information that can be useful to corporate stakeholders. In doing so, we also attempt to quantify and understand the private information gathered by lenders that shapes how loan agreements are written. Using natural language processing tech niques, we extract latent topics from the text of public loan contracts and document sig nificant variation in the content and structure of agreements across borrowers and lenders. We show that these topics and different contract terms are predictive of future borrower outcomes, such as bankruptcy, credit downgrades, performance, and investment, even af ter controlling for standard variables. However, we also find evidence that loan agreement topics are associated with future stock returns in the months following disclosure, suggest ing that it takes time for other corporate stakeholders to obtain this information or infer it from the loan agreement. In future analyses, we hope to expand to using out-of-sample analyses and further explore the conditions under which particular contract topics are more or less informative. Our results indicate that loan contracts reflect private lender information that could be useful to other corporate stakeholders and highlight the richness of unstructured legal text in loan contracts. 

Acknowledgements (Research Assistanship)

• Acharya, V., E. Carletti, F. Restoy, and X. Vives (2024). Barcelona 6: Banking Turmoil and Regulatory Reform, CEPR Press, Paris & London. https://cepr.org/publications/books-and-reports/barcelona-6-banking-turmoil-and-regulatory-reform

• Shalev, R., A. Marra, and Pettinicchio, A. K. (2024). Home Sweet Home: CEOs Acquiring Firms in their Birth Countries. Journal of Accounting Research https://doi.org/10.1111/1475-679X.12533

• Mayew, W. J., J. Pinto, and X. Wu (2024). As-Reported Corporate Issued Guidance. Available at SSRN: https://ssrn.com/abstract=4405292

• Bianchi, P. A., J. R. Francis, A. Marra, and N. Pecchiari (2023). Do Mafia Ties Matter? Accountants with Mafia Connections, and the Quality of their Work as Monitors in the ‘Clean’ Economy. Available at SSRN: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3957650