Risk overhang and loan portfolio decisions

Despite operating under substantial regulatory constraints, we find that commercial banks manage their investments largely consistent with the predictions of portfolio choice models with capital market imperfections. Based on 1990-2002 data for small (assets less than $1 billion) U.S. commercial banks, net new lending to the business, real estate, and consumer sectors increased with expected sector profitability, tended to decrease with the illiquidity of existing (overhanging) loan stocks, and was responsive to correlations in cross-sector returns. Small banks are most appropriate for this study, because they make illiquid loans and manage risk via on-balance sheet (non-hedged) diversification strategies.Portfolio management ; Investment banking

Ancient pigs reveal a near-complete genomic turnover following their introduction to Europe

Archaeological evidence indicates that pig domestication had begun by ~10,500 y before the present (BP) in the Near East, and mitochondrial DNA (mtDNA) suggests that pigs arrived in Europe alongside farmers ~8,500 y BP. A few thousand years after the introduction of Near Eastern pigs into Europe, however, their characteristic mtDNA signature disappeared and was replaced by haplotypes associated with European wild boars. This turnover could be accounted for by substantial gene flow from local Euro-pean wild boars, although it is also possible that European wild boars were domesticated independently without any genetic con-tribution from the Near East. To test these hypotheses, we obtained mtDNA sequences from 2,099 modern and ancient pig samples and 63 nuclear ancient genomes from Near Eastern and European pigs. Our analyses revealed that European domestic pigs dating from 7,100 to 6,000 y BP possessed both Near Eastern and European nuclear ancestry, while later pigs possessed no more than 4% Near Eastern ancestry, indicating that gene flow from European wild boars resulted in a near-complete disappearance of Near East ancestry. In addition, we demonstrate that a variant at a locus encoding black coat color likely originated in the Near East and persisted in European pigs. Altogether, our results indicate that while pigs were not independently domesticated in Europe, the vast majority of human-mediated selection over the past 5,000 y focused on the genomic fraction derived from the European wild boars, and not on the fraction that was selected by early Neolithic farmers over the first 2,500 y of the domestication process