At the 2007 Bank Structure Conference, a number of speakers warned of forthcoming problems in mortgage markets and in credit markets more generally. In August 2007, markets began to seize up with adverse effects originating in the subprime mortgage markets quickly spilling over to alternative markets. The 44th annual Conference evaluated the causes of, implications of, and means to address the turmoil in credit markets. We brought together industry leaders, scholars and regulatory authorities to critically address these issues. Highlights are listed below.
44th Annual Conference on Bank Structure and Competition
Ben S. Bernanke
Chairman, Board of Governors of the Federal Reserve SystemJames B. Lockhart III
Director, Office of the Federal Housing Enterprise OversightJames E. Rohr
Chairman and Chief Executive Officer, The PNC Financial Services Group05/14/08
7:30 AM
Registration and Continental Breakfast
8:15 AM
Welcoming Remarks
Douglas D. Evanoff, Senior Financial Economist and Vice President, Federal Reserve Bank of Chicago
8:30 AM
Corporate Issues
Moderator and Discussant
Lemma W. Senbet, William E. Mayer Chair Professor of Finance, Robert H. Smith School of Business, University of Maryland
The Role of Private Equity Group Reputation in Buyout
Christopher M. James, University of Florida
Cem Demiroglu, University of Florida
Institutional Investors, Credit Supply Uncertainty and the Leverage of the Firm
Massimo Massa, INSEAD
Ayako Yasuda, University of Pennsylvania
Lei Zhang, INSEAD
Market Discipline in the Banking Industry: Evidence from Spread Dispersion
Giuliano Iannotta, Università Bocconi
10:00 AM
Break
10:15 AM
Financial Structure
Moderator and Discussant
Robert DeYoung, Capitol Federal Professor in Financial Institutions and Markets, University of Kansas School of Business
Does Credit Supply Affect Small-Firm Finance?
Tara N. Rice, Federal Reserve Bank of Chicago
Philip E. Strahan, Boston College
Testing the "Quiet Life" of U.S. Banks with Lerner Indices
Michael Koetter, University of Groningen
James W. Kolari, Texas A&M University
Laura Spierdijk, University of Groningen
Bank Mergers and the Dynamics of Deposit Interest Rates
Ben R. Craig, Federal Reserve Bank of Cleveland and Deutsche Bundesbank
Valeriya Dinger, University of Bonn, Germany
12:00 PM
Luncheon
1:15 PM
Financial Relationships
Moderator and Discussant
Anjan V. Thakor, John E. Simon Professorship of Finance, Olin School of Business, Washington University
Who Runs? The Importance of Relationships in Bank Runs
Rajkamal Iyer, University of Amsterdam
Manju Puri, Duke University
Lending Relationships and Information Rents: Do Banks Exploit Their Information Advantages
Carola Schenone, University of Virginia
Bank Lending, Financing Constraints and SME Investment
Santiago Carbó Valverde, University of Granada and Federal Reserve Bank of Chicago
Francisco Rodríguez-Fernández, University of Granada
Gregory F. Udell, Indiana University
Francisco Rodríguez-Fernández, University of Granada
Benefits of Relationship Banking: Evidence from Consumer Credit Markets
Sumit Agarwal, Federal Reserve Bank of Chicago
Souphala Chomsisengphet, Office of the Comptroller of the Currency
Chunlin Liu, University of Nevada–Reno
Nicholas S. Souleles, University of Pennsylvania
3:15 PM
Break
3:30 PM
Credit Channels
Moderator and Discussant
Debbie J. Lucas, Donald C. Clark Household International Distinguished Professor of Finance, Kellogg School of Management,, Northwestern University
Hazardous Times for Monetary Policy: What Do Twenty-three Million Bank Loans Say About the Effects of Monetary Policy and Credit Risk
Gabriel Jiménez, Bank of Spain
Steven Ongena, Tilburg University, Center for Economic Policy Research and CentER
José Luís Peydró, European Central Bank
Jesús Saurina, Bank of Spain
Securitization and the Bank Lending Channel
Yener Altunbaş, University of Wales
Leonardo Gambacorta, Bank of Italy
David Marqués Ibáñez, European Central Bank
Financial Globalization and the Transmission of Credit Supply Shocks: Evidence from an Emerging Market
Philipp Schnabl, Harvard University
5:15 PM
Reception
7:00 AM
Registration and Continental Breakfast
8:15 AM
Welcoming Remarks
Charles L. Evans, President and Chief Executive Officer, Federal Reserve Bank of Chicago
8:30 AM
Keynote Address
Introduction
Charles L. Evans, President and Chief Executive Officer, Federal Reserve Bank of Chicago
Speaker
Ben S. Bernanke, Chairman, Board of Governors of the Federal Reserve System
9:30 AM
Break
9:45 AM
Theme Panel—Credit Market Turmoil: Causes, Consequences and Cures
Moderator
Daniel G. Sullivan, Senior Vice President and Director of Research, Federal Reserve Bank of Chicago
Panelists
William C. Dudley, Executive Vice President, Federal Reserve Bank of New York
Joe L. Price, Chief Financial Officer, Bank of America Corporation
Richard Cantor, Managing Director, Moody's Investors Service
Jason H. P. Kravitt, Partner, Mayer Brown, LLP
Richard J. Herring, Jacob Safra Professor of International Banking, University of Pennsylvania
12:00 PM
Luncheon
Introduction
Gordon Werkema, First Vice President and Chief Operating Officer, Federal Reserve Bank of Chicago
Keynote
James E. Rohr, Chairman and Chief Executive Officer, The PNC Financial Services Group
1:45 PM
Markets and Turmoil
Moderator
George G. Kaufman, John F. Smith Professor of Finance and Economics, Loyola University Chicago
The Northern Rock Crises and Resolution
David T. Llewellyn, Loughborough University
Which Banks Sponsored Structured Investment Vehicles?
Carlos Arteta, Board of Governors of the Federal Reserve System
Mark S. Carey, Board of Governors of the Federal Reserve System
Ricardo Correa, Board of Governors of the Federal Reserve System
Subprime Markets
Joseph R. Mason, Drexel University
Joshua Rosner, Graham Fisher & Co.
3:30 PM
Break
3:45 PM
Fringe Markets: Payday Loans, Bounced Checks and Usurious Loans
Moderator
Anna Paulson, Federal Reserve Bank of Chicago
Payday Holiday: How Households Fare after Payday Credit Bans
Donald P. Morgan, Federal Reserve Bank of New York
Michael R. Strain, Cornell University
Bouncing Out of the Banking System: An Empirical Analysis of Involuntary Bank Account Closures
Dennis W. Campbell, Harvard Business School
Asis Martinez-Jerez, Harvard Business School
Peter Tufano, Harvard Business School
Expanding Credit Access: Using Randomized Supply Decisions to Estimate the Impacts
Dean Karlan, Yale University
Jonathan Zinman, Dartmouth College
5:15 PM
Reception
7:30 AM
Continental Breakfast
8:30 AM
Subprime Market Performance and Outlook
Moderator
Richard J. Rosen, Federal Reserve Bank of Chicago
Subprime Outcomes: Risky Mortgages, Homeownership Experiences and Foreclosures
Kristopher Gerardi, Federal Reserve Bank of Boston and Boston University
Adam Hale Shapiro, Federal Reserve Bank of Boston and Boston University
Paul Willen, Federal Reserve Bank of Boston
The Consequences of Mortgage Credit Expansion: Evidence from the 2007 Mortgage Default Crisis
Atif R. Mian, University of Chicago
Amir Sufi, University of Chicago
The Outlook for Subprime Adjustable-Rate Mortgages
Shane M. Sherlund, Board of Governors of the Federal Reserve System
10:00 AM
Break
10:15 AM
Addressing Mortgage Market Problems
Moderator
Alicia Williams , Federal Reserve Bank of Chicago
Jan Hatzius, Managing Director and Chief U.S. Economist, Goldman, Sachs and Company
Sandra Braunstein, Director, Division of Consumer and Community Affairs, Board of Governors of the Federal Reserve System
Kieran P. Quinn, CMB, Chairman, Mortgage Bankers Association
Faith Arnold Schwartz, Senior Vice President, Option One Mortgage Corporation and Executive Director, Hope Now Alliance
12:15 PM
Luncheon
Introduction
Charles L. Evans, President and Chief Executive Officer, Federal Reserve Bank of Chicago
Keynote
James B. Lockhart III, Director, Office of Federal Housing Enterprise Oversight
1:45 PM
Session A: Determinants of Subprime Lending
Moderator
Sumit Agarwal, Federal Reserve Bank of Chicago
How Do Financial Frictions Shape the Products Market? Evidence from Mortgage Originations
James Vickery, Federal Reserve Bank of New York
Credit Booms and Lending Standards: Evidence from the Subprime Mortgage Market
Giovanni Dell'Ariccia, International Monetary Fund
Deniz Igan, International Monetary Fund
Luc Laeven, International Monetary Fund
Understanding the Subprime Mortgage Market
Yuliya Demyanyk, Federal reserve Bank of St. Louis,
Otto Van Hemert, New York University
Session B: Loan Syndication Markets
Moderator
Luca Benzoni, Federal Reserve Bank of Chicago
Banking and Securitization
Wenying Jiangli, Federal Deposit Insurance Coorporation
Matthew Pritsker, Board of Governors of the Federal Reserve System
Peter Raupach, Deutsche Bundesbank
Lead Arranger Reputation an dthe Loan Syndication Market
Radhakrishnan Gopalan, Washington University
Vikram Nanda, Arizona State University
Vijay Yerramilli, Kelley School of Business, Indiana University
Institutional Investment in Syndicated Loans
Debarshi Nandy, York University
Pei Shao, University of Northern British Columbia
