Banking relationships and sell-side research

This paper examines disclosures by sell-side analysts when their institution has a lending relationship with the firms being covered. Lending-affiliated analysts’ earnings forecasts are found to be more accurate relative to forecasts by other analysts but this differential accuracy manifests itself only after the advent of the loan. Despite this increased earnings forecast accuracy, lending-affiliated analysts exhibit undue optimism in their brokerage recommendations and forecasts of long term growth. The optimism exists both before and after the lending commences. The evidence suggests that any insights into the covered firm via thelending relationship are employed by bank analysts in a selective manner. They appear unwilling to compromise on disclosures where expost accuracy is clearly revealed, possibly to preserve their own personal reputation. However, they are overly optimistic on other disclosures where resolution is less readily verifiable, possibly to promote their lending client’s financial standing.Forecasting ; Investment banking

Choroid Plexus Papillomas in two Siblings: Case Report [İki Kardeşte Görülen Koroid Pleksus Papillomu: Olgu Sunumu]

Choroid plexus papilloma (CPP) is a rare, benign epithelial brain tumor of the nervous system seen particularly in infants. Familial cases are extremely uncommon. Some other form of malignant tumors was noted in the relatives of patients with CPPs, and some genetic defects regarding this coincidence were reported in the literature. These neoplasms are occasionally bilateral and hydrocephalus is an associated sign in most of the cases. We report three lateral ventricle CPPs in two siblings, at the age of 7 month and 2 years respectively. All tumors were resected with parietotemporal craniotomy and a superior temporal sulcus approach to the lateral ventricle. To avoid a concomitant need of ventriculoperitoneal shunt insertion, external ventricular drainage was inserted for a week in the postoperative period relieving symptoms of hydrocephalus. Search for a hereditary defect in the p53 gene of the second infant (7 months old) revealed no mutation. Postoperative courses were uneventful and the patients were followed for three years without any recurrence. Bilateral CPPS are rare and unusual in two siblings. A genetic predisposition such as the p53 mutation should be investigated in bilateral CPPs in particular

Bank performance and executive pay: tournament or teamwork

We investigate the relationship between the dispersion of executive pay and bank performance/valuation by examining two competing theories, the tournament theory (hierarchical wage structure) and the equity fairness theory (compressed wage structure). The key variable of executive pay dispersion is measured using a hand-collected dataset composed of 63 banks from OECD countries and 29 banks from developing countries. The dataset covers the period 2004 to 2012. By combining and modifying a translog profit function and a pay-dispersion model, we are able to address the potential problems of relying on reduced-form estimation. In our subsample of developed and civil law countries, where bank performance is measured by either Tobin’s Q or by the price-to-book ratio, the overall impact of executive pay dispersion is mostly negative, and we find supporting evidence for the equity fairness theory, except for very high levels of dispersion. There is a non-linear effect, as banks perform best when there is either very low or very high executive pay dispersion. For developing country sample banks, greater executive pay dispersion has a negative impact on bank profit. In our subsample of common law countries, however, we find no evidence of a significant impact of executive pay dispersion on bank performance. We conclude that lower executive pay dispersion, a proxy for teamwork, is mostly effective in enhancing bank performance in a significant section of sample banks, i.e., civil law and developing countries

Banking relationships and sell-side research

Abstract Prior literature argues that significant benefits accrue to the lender from relationship banking and that commercial banks have privileged access to a firm's private information as a consequence of their lending arrangements. We examine whether "related" analysts with commercial lending ties with a client have an informational edge. Specifically, we explore whether such related sell-side research is likely to produce more accurate forecasts. We provide evidence that the presence of a lending relationship between a bank and a firm is indeed associated with more accurate forecasts by the bank's analyst for that firm. A similar effect is found with respect to analysts related to the firm via past underwriting relationships. Furthermore, analysts with an underwriting connection and all-star analysts, but not the analysts with a lending connection, appear to be "leaders" in the sense of having other analysts herding on their forecasts suggesting that a commercial bank's relations with a firm are perhaps less public and have not garnered as much attention. Our findings indicate that there are informational advantages for related sell-side analysts. * We are grateful t

Risk sharing in mortgage loan agreements

10.1142/S0219091504000135Review of Pacific Basin Financial Markets and Policies72233-25