We use a large sample of US banks to construct a new indicator of managerial beliefs based on bank provisioning. This indicator does not only anticipate a future charge-of but also explains future loan growth and other variables. In particular, the indicator shows that an increase in managerial optimism (pessimism) leads to expanded (tight) lending, lever age, and a riskier (less risky) portfolio. Our fndings confrm that widespread managerial optimism (pessimism) prevailed before (during) the 2007-2008 fnancial crisis and that changes in managerial beliefs played an important role in the lending and leverage cycles.
Managerial Beliefs and Banking Behavior
Damiano B. Silipo
;
2023-01-01
Abstract
We use a large sample of US banks to construct a new indicator of managerial beliefs based on bank provisioning. This indicator does not only anticipate a future charge-of but also explains future loan growth and other variables. In particular, the indicator shows that an increase in managerial optimism (pessimism) leads to expanded (tight) lending, lever age, and a riskier (less risky) portfolio. Our fndings confrm that widespread managerial optimism (pessimism) prevailed before (during) the 2007-2008 fnancial crisis and that changes in managerial beliefs played an important role in the lending and leverage cycles.File in questo prodotto:
Non ci sono file associati a questo prodotto.
I documenti in IRIS sono protetti da copyright e tutti i diritti sono riservati, salvo diversa indicazione.
