Corporate Finance of Financial Intermediaries

September 29 and 30, 2006

A conference jointly sponsored by the Federal Reserve Bank of New York, the Wharton Financial Institutions Center of the University of Pennsylvania, and the Review of Financial Studies.

Overview
The goal of the conference is to promote a better understanding of corporate decisions at the intermediary level. This understanding in turn may help regulators promote efficiency and financial stability.

Seating is very limited; attendance is by invitation only.Conference Location
The Wharton School, University of Pennsylvania
Philadelphia, Pennsylvania

Conference Organizers
Franklin Allen, University of Pennsylvania
Hamid Mehran, Federal Reserve Bank of New York
Maureen O’Hara, Cornell University

Program
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Friday, September 29
7:30 a.m. Continental Breakfast

8:10 a.m.

Welcoming Remarks
Session 1:

Credit Market and Corporate Decisions

Chair: Kose John, New York University

8:15 a.m.

Credit Market Competition and Capital Regulation pdf


Speakers:
Franklin Allen
, University of Pennsylvania
Elena Carletti, University of Frankfurt
Robert Marquez, Arizona State University
Discussant:
Anjan Thakor, Washington University in St. Louis
9:15 a.m. Asset-Backed Securities: Costs and Benefits of “Bankruptcy Remoteness” pdf
Speakers:
Kenneth M. Ayotte, Columbia University
Stav Gaon, Columbia University
Discussant:
Robert Marquez
, Arizona State University
10:15 a.m.

Break

Session 2:

Relationship Lending

Chair: Franklin Allen, University of Pennsylvania

10:35 a.m.

International Evidence on Relationship and Transactional Banks as Delegated Monitors pdf

Speakers:
Kathryn L. Dewenter, University of Washington
Alan C. Hess, University of Washington

Discussant:
Mark Flannery, University of Florida

11:35 a.m.

Lending Relationships and Loan Contract Terms: Does Size Matter? pdf

Speakers:
Sreedhar Bharath, University of Michigan
Sandeep Dahiya, Georgetown University
Anthony Saunders, New York University
Anand Srinivasan, National University of Singapore

Discussant:
Douglas Diamond, University of Chicago

12:35 p.m.

Lunch

Session 3:

Consolidation and Corporate Policies

Chair: Mark Flannery, University of Florida

1:45 p.m.

The Effect of Bank Mergers on Loan Prices: Evidence from the U.S. pdf

Speaker:
Isil Erel, Ohio State University

Discussant:
Steven Drucker, Columbia University
2:45 p.m.

Are Acquisitions an Operational Hedge? The Interaction of Financial and Operational Hedging pdf

Speaker:
Kristine Watson Hankins, University of Kentucky

Discussant:
Kose John
, New York University
2:45 p.m.

Break

Session 4:

Corporate Governance and Control

Chair: Maureen O’Hara, Cornell University

3:15 p.m.

Corporate Governance, Regulation, and Bank Risk Taking pdf

Speakers:
Luc Laeven, International Monetary Fund
Ross Levine, Brown University

Discussant:
Haluk Unal, University of Maryland
4:15 p.m.

Does Banks’ Corporate Control Benefit Firms? Evidence from U.S. Banks’ Control over Firms’ Voting Rights pdf

Speakers:
João A. C. Santos, Federal Reserve Bank of New York
Kristin E. Wilson, Harvard University

Discussant:
Manju Puri, Duke University
6:30 p.m.

Reception and Dinner

Distinguished Speaker: Anthony M. Santomero, McKinsey & Company

Saturday, September 30

7:45 a.m.

Continental Breakfast

Session 5:

Relationship Lending and Certification

Chair: Richard Herring, University of Pennsylvania

8:30 a.m.

What You Sell Is What You Lend? Explaining Trade Credit Contracts pdf

Speakers:
Mike Burkart, Stockholm School of Economics
Tore Ellingsen, Stockholm School of Economics
Mariassunta Giannetti, Stockholm School of Economics

Discussant:
Ronald Masulis, Vanderbilt University
9:30 a.m.

The Real Effects of Debt Certification: Evidence from the Introduction of Bank Loan Ratings pdf

Speaker:
Amir Sufi, University of Chicago

Discussant:
Anthony Saunders, New York University
10:30 a.m.

Break

10:50 a.m.

The Dark Side of Bank-Firm Relationships: The (Market) Liquidity Impact of Bank Lending pdf

Speakers:
Nishant Dass, INSEAD
Massimo Massa, INSEAD

Discussant:
Adriano Rampini, Duke University
12:00 p.m.

Lunch and Adjournment