Thomas Rauter

Department of Accounting, Finance, and Statistics

Publication

Procyclicality of U.S. Bank Leverage

  • With Christian Laux (WU Vienna)
  • Lead Article, 2016 JAR Conference Paper
  • Journal of Accounting Research, 2017, 55(2): 237-273

In light of the current debate about the link between accounting and financial stability, we investigate the determinants of procyclical book leverage for US commercial and savings banks. We find that total asset growth and GDP growth are both positively related to book leverage growth. Our evidence is not consistent with the notion that fair value accounting contributes to procyclical leverage or that historical cost accounting reduces procyclicality. Overall, the business model of banks is more important for procyclical leverage than accounting or regulatory risk weights.

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Working Papers

Prestige and Loan Pricing

Using unique survey data, we show that prestigious companies face lower costs of borrowing despite the fact that prestige does not predict credit risk. The results are robust to matched sample analyses and a regression discontinuity design. We also show that there is more competition for prestigious companies and that the effect of prestige on upfront fees is stronger for new lending relationships. Furthermore, banks that lend to prestigious companies increase lending afterwards. Our findings uncover a novel channel of banks establishing lending relationships with prestigious companies in order to signal their quality and attract future business.

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Disclosure Regulation, Corruption, and Investment: Evidence from Natural Resource Extraction

  • Job Market Paper
  • Available soon

Work in Progress

Bank Governance and Financial Stability


The Effect of Foreign Corruption Acts on Real Outcomes Abroad