Workshop Series: Rüediger Fahlenbrach
Abstract: The collapse in the capitalization of banks is at the heart of the recent financial crisis. Many explanations have been offered for this collapse. All of them seem to be related to changes in the economy, in banks, in executive compensation, and in deregulation that took place since the adoption of the Gramm-Leach-Bliley Act of 1999. In this paper, we show that the performance of banks during the crisis of 1998 predicts the performance of U.S. banks during the recent financial crisis. This effect is economically important. In particular, it is economically as important as the leverage of banks before the start of the crisis. The effect is not explained by banks having the same executive in both crises.
Join our staff, students and alumni attending workshops presented by visiting academics on their area of research expertise.
RUEDIGER FAHLENBRACH is Swiss Finance Institute Assistant Professor at Ecole Polytechnique Fédérale de Lausanne (EPFL), Switzerland. Formerly on the faculty of the Fisher College of Business of the Ohio State University (USA), he holds a Ph.D. in Finance from the University of Pennsylvania (Wharton). He has research interests in empirical corporate finance, in particular corporate governance and entrepreneurship. Ruediger Fahlenbrach has published in some of the leading academic journals in finance, including the Journal of Financial Economics, the Review of Financial Studies and the Journal of Financial and Quantitative Analysis. His research has been reported in many large-circulation newspapers such as The New York Times, The Wall Street Journal, The Economist, Le Temps, NZZ, Handelsblatt, Forbes Magazine, USA Today, and Fortune Magazine.