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and members of the Federal Reserve System's Task Force on Subordinated Debt. The views expressed, however, are those of the authors and do not necessarily reflect the views of our colleagues mentioned above, the Federal Reserve Banks of Atlanta or Chicago, or the Federal Reserve System. ABSTRACT In recent years there has been a growing realization that(More)
We develop a simple approach to valuing stocks in the presence of learning about average pro¯tability. The market-to-book ratio (M/B) increases with uncertainty about average pro¯tability, especially for ¯rms that pay no dividends. M/B is predicted to decline over a ¯rm's lifetime due to learning, with steeper decline when the ¯rm is young. These(More)
Several recent studies have recommended greater reliance on subordinated debt as a tool to discipline bank risk taking. Some of these proposals recommend using sub-debt yield spreads as triggers for supervisory discipline under prompt corrective action (PCA). Currently such action is prompted by capital adequacy measures. This paper provides the first(More)
and members of the Federal Reserve System's Task Force on Subordinated Debt. The views expressed, however, are those of the authors and do not necessarily reflect the views of the colleagues mentioned above, the Federal Reserve Banks of Atlanta or Chicago, or the Federal Reserve System. Any remaining errors are the authors' responsibility. Abstract: In(More)
an anonymous reviewer for valuable comments and suggestions on earlier versions of this paper. The research assistance of Syed Hussain is greatly appreciated. The views expressed here are the authors' and not necessarily those of the Federal Reserve Banks of Atlanta and Chicago or the Federal Reserve System. Any remaining errors are the authors'(More)
thank Lisle Cormier for research assistance. The views expressed here are the authors' and not necessarily those of the Federal Reserve Bank of Atlanta or the Federal Reserve System. Any remaining errors are the authors' responsibility. on the " Publications " link and then " Working Papers. " To receive notification about new papers, please use the on-line(More)