Three Essays in Banking: Corporate Governance, Internationalization, and Government Bailouts

This dissertation extends a growing literature on banking and finance by investigating bank corporate governance, internationalization, and bailouts. The first essay conducts the first assessment of shareholder activism in banking and its effects on risk and performance. Activism can create value and be an effective monitoring mechanism for banks, but it may also be a destabilizing mechanism, as maximizing shareholder value may cause financial instability. We focus on the conflicts among bank shareholders, managers, and creditors (e.g., regulators, deposit insurers, taxpayers, depositors). We find activism may generally be a destabilizing force, increasing bank risk-taking, but creating market value for shareholders, and leaving operating returns unchanged. This is consistent with the empirical dominance of the Shareholder-Creditor Conflict, which predicts that activist shareholders may induce managers to take higher risk to increase returns at the expense of creditors, given creditors’ difficulty in monitoring and regulatory-induced incentives. However, during financial crises, the increase in risk vanishes, suggesting activism may not be a major cause of risk during such times. From a public perspective, creditors (including the government) may lose during normal times, but not during crises. In the second essay (co-authored with Allen N. Berger, Sadok El Ghoul, and Omrane Guedhami), we document a positive relation between internationalization and bank risk. This is consistent with the empirical dominance of the market risk hypothesis – whereby internationalization increases banks’ risk due to market-specific factors in foreign vii markets – over the diversification hypothesis – whereby internationalization allows banks to reduce risk through diversification of their operations. The results continue to hold following a variety of robustness tests, including endogeneity and sample selection bias. We also find that the magnitude of this effect is more pronounced during financial crises. The results appear to be at least partially explained by agency problems related to poor corporate governance. These findings suggest that authorities might consider internationalization as an additional factor in bank supervision and regulation. In the third essay (co-authored with Allen N. Berger), we investigate whether the U.S. government bailout of banks during the recent financial crisis, the Troubled Assets Relief Program (TARP), gave recipients competitive advantages. Using a difference-indifference (DID) approach, we find that: 1) TARP recipients received competitive advantages and increased both their market shares and market power; 2) results may be driven primarily by the safety channel – TARP banks may be perceived as safer, which is partially offset by the cost disadvantage channel – TARP funds may be relatively expensive; and 3) these competitive advantages are primarily or entirely due to TARP banks that repaid early. The results of this paper may help explain other findings in the literature on TARP and yield important policy implications. The costs of the competitive distortions of bailouts should be weighed against the costs and benefits in terms of lending, risk taking, financial stability, and the overall effects on the economy

Did Saving Wall Street Really Save Main Street? The Real Effects of TARP on Local Economic Conditions

We investigate whether saving Wall Street through the Troubled Assets Relief Program (TARP) really saved Main Street during the recent financial crisis. Our difference-in-difference analysis suggests that TARP statistically and economically significantly increased net job creation and net hiring establishments and decreased business and personal bankruptcies. The results are robust, including accounting for endogeneity. The main mechanisms driving the results appear to be increases in commercial real estate lending and off-balance sheet real estate guarantees. These results suggest that saving Wall Street via TARP may have helped save Main Street, complementing the TARP literature and contributing to the cost-benefi

Evidence of West Nile virus (WNV) circulation in wild birds and WNV RNA negativity in mosquitoes of the Danube Delta Biosphere Reserve, Romania, 2016

West Nile virus (WNV) is a zoonotic flavivirus whose transmission cycle in nature includes wild birds as amplifying hosts and ornithophilic mosquito vectors. Bridge vectors can transmit WNV to mammal species potentially causing West Nile Fever. Wild bird migration is a mode of WNV introduction into new areas. The Danube Delta Biosphere Reserve (DDBR) is a major stopover of wild birds migrating between Europe and Africa. The aim of this study was to investigate the presence of WNV in the DDBR during the 2016 transmission season in wild birds and mosquitoes. Blood from 68 wild birds (nine different species) trapped at four different locations was analyzed by competitive ELISA and Virus Neutralization Test (VNT), revealing positive results in 8/68 (11.8%) of the wild birds by ELISA of which six samples (three from juvenile birds) were confirmed seropositive by VNT. Mosquitoes (n = 6523, 5 genera) were trapped with CDC Mini Light traps at two locations and in one location resting mosquitoes were caught. The presence of WNV RNA was tested in 134 pools by reverse transcription quantitative PCR (RT-qPCR). None of the pools was positive for WNV-specific RNA. Based on the obtained results, WNV was circulating in the DDBR during 2016

Rising rural body-mass index is the main driver of the global obesity epidemic in adults

Body-mass index (BMI) has increased steadily in most countries in parallel with a rise in the proportion of the population who live in cities(.)(1,2) This has led to a widely reported view that urbanization is one of the most important drivers of the global rise in obesity(3-6). Here we use 2,009 population-based studies, with measurements of height and weight in more than 112 million adults, to report national, regional and global trends in mean BMI segregated by place of residence (a rural or urban area) from 1985 to 2017. We show that, contrary to the dominant paradigm, more than 55% of the global rise in mean BMI from 1985 to 2017-and more than 80% in some low- and middle-income regions-was due to increases in BMI in rural areas. This large contribution stems from the fact that, with the exception of women in sub-Saharan Africa, BMI is increasing at the same rate or faster in rural areas than in cities in low- and middle-income regions. These trends have in turn resulted in a closing-and in some countries reversal-of the gap in BMI between urban and rural areas in low- and middle-income countries, especially for women. In high-income and industrialized countries, we noted a persistently higher rural BMI, especially for women. There is an urgent need for an integrated approach to rural nutrition that enhances financial and physical access to healthy foods, to avoid replacing the rural undernutrition disadvantage in poor countries with a more general malnutrition disadvantage that entails excessive consumption of low-quality calories.Peer reviewe

Height and body-mass index trajectories of school-aged children and adolescents from 1985 to 2019 in 200 countries and territories: a pooled analysis of 2181 population-based studies with 65 million participants

Summary Background Comparable global data on health and nutrition of school-aged children and adolescents are scarce. We aimed to estimate age trajectories and time trends in mean height and mean body-mass index (BMI), which measures weight gain beyond what is expected from height gain, for school-aged children and adolescents. Methods For this pooled analysis, we used a database of cardiometabolic risk factors collated by the Non-Communicable Disease Risk Factor Collaboration. We applied a Bayesian hierarchical model to estimate trends from 1985 to 2019 in mean height and mean BMI in 1-year age groups for ages 5–19 years. The model allowed for non-linear changes over time in mean height and mean BMI and for non-linear changes with age of children and adolescents, including periods of rapid growth during adolescence. Findings We pooled data from 2181 population-based studies, with measurements of height and weight in 65 million participants in 200 countries and territories. In 2019, we estimated a difference of 20 cm or higher in mean height of 19-year-old adolescents between countries with the tallest populations (the Netherlands, Montenegro, Estonia, and Bosnia and Herzegovina for boys; and the Netherlands, Montenegro, Denmark, and Iceland for girls) and those with the shortest populations (Timor-Leste, Laos, Solomon Islands, and Papua New Guinea for boys; and Guatemala, Bangladesh, Nepal, and Timor-Leste for girls). In the same year, the difference between the highest mean BMI (in Pacific island countries, Kuwait, Bahrain, The Bahamas, Chile, the USA, and New Zealand for both boys and girls and in South Africa for girls) and lowest mean BMI (in India, Bangladesh, Timor-Leste, Ethiopia, and Chad for boys and girls; and in Japan and Romania for girls) was approximately 9–10 kg/m2. In some countries, children aged 5 years started with healthier height or BMI than the global median and, in some cases, as healthy as the best performing countries, but they became progressively less healthy compared with their comparators as they grew older by not growing as tall (eg, boys in Austria and Barbados, and girls in Belgium and Puerto Rico) or gaining too much weight for their height (eg, girls and boys in Kuwait, Bahrain, Fiji, Jamaica, and Mexico; and girls in South Africa and New Zealand). In other countries, growing children overtook the height of their comparators (eg, Latvia, Czech Republic, Morocco, and Iran) or curbed their weight gain (eg, Italy, France, and Croatia) in late childhood and adolescence. When changes in both height and BMI were considered, girls in South Korea, Vietnam, Saudi Arabia, Turkey, and some central Asian countries (eg, Armenia and Azerbaijan), and boys in central and western Europe (eg, Portugal, Denmark, Poland, and Montenegro) had the healthiest changes in anthropometric status over the past 3·5 decades because, compared with children and adolescents in other countries, they had a much larger gain in height than they did in BMI. The unhealthiest changes—gaining too little height, too much weight for their height compared with children in other countries, or both—occurred in many countries in sub-Saharan Africa, New Zealand, and the USA for boys and girls; in Malaysia and some Pacific island nations for boys; and in Mexico for girls. Interpretation The height and BMI trajectories over age and time of school-aged children and adolescents are highly variable across countries, which indicates heterogeneous nutritional quality and lifelong health advantages and risks

Worldwide trends in underweight and obesity from 1990 to 2022: a pooled analysis of 3663 population-representative studies with 222 million children, adolescents, and adults

Background Underweight and obesity are associated with adverse health outcomes throughout the life course. We estimated the individual and combined prevalence of underweight or thinness and obesity, and their changes, from 1990 to 2022 for adults and school-aged children and adolescents in 200 countries and territories. Methods We used data from 3663 population-based studies with 222 million participants that measured height and weight in representative samples of the general population. We used a Bayesian hierarchical model to estimate trends in the prevalence of different BMI categories, separately for adults (age ≥20 years) and school-aged children and adolescents (age 5–19 years), from 1990 to 2022 for 200 countries and territories. For adults, we report the individual and combined prevalence of underweight (BMI <18·5 kg/m2) and obesity (BMI ≥30 kg/m2). For schoolaged children and adolescents, we report thinness (BMI <2 SD below the median of the WHO growth reference) and obesity (BMI >2 SD above the median). Findings From 1990 to 2022, the combined prevalence of underweight and obesity in adults decreased in 11 countries (6%) for women and 17 (9%) for men with a posterior probability of at least 0·80 that the observed changes were true decreases. The combined prevalence increased in 162 countries (81%) for women and 140 countries (70%) for men with a posterior probability of at least 0·80. In 2022, the combined prevalence of underweight and obesity was highest in island nations in the Caribbean and Polynesia and Micronesia, and countries in the Middle East and north Africa. Obesity prevalence was higher than underweight with posterior probability of at least 0·80 in 177 countries (89%) for women and 145 (73%) for men in 2022, whereas the converse was true in 16 countries (8%) for women, and 39 (20%) for men. From 1990 to 2022, the combined prevalence of thinness and obesity decreased among girls in five countries (3%) and among boys in 15 countries (8%) with a posterior probability of at least 0·80, and increased among girls in 140 countries (70%) and boys in 137 countries (69%) with a posterior probability of at least 0·80. The countries with highest combined prevalence of thinness and obesity in school-aged children and adolescents in 2022 were in Polynesia and Micronesia and the Caribbean for both sexes, and Chile and Qatar for boys. Combined prevalence was also high in some countries in south Asia, such as India and Pakistan, where thinness remained prevalent despite having declined. In 2022, obesity in school-aged children and adolescents was more prevalent than thinness with a posterior probability of at least 0·80 among girls in 133 countries (67%) and boys in 125 countries (63%), whereas the converse was true in 35 countries (18%) and 42 countries (21%), respectively. In almost all countries for both adults and school-aged children and adolescents, the increases in double burden were driven by increases in obesity, and decreases in double burden by declining underweight or thinness. Interpretation The combined burden of underweight and obesity has increased in most countries, driven by an increase in obesity, while underweight and thinness remain prevalent in south Asia and parts of Africa. A healthy nutrition transition that enhances access to nutritious foods is needed to address the remaining burden of underweight while curbing and reversing the increase in obesit

Impact of COVID-19 on cardiovascular testing in the United States versus the rest of the world

Objectives: This study sought to quantify and compare the decline in volumes of cardiovascular procedures between the United States and non-US institutions during the early phase of the coronavirus disease-2019 (COVID-19) pandemic. Background: The COVID-19 pandemic has disrupted the care of many non-COVID-19 illnesses. Reductions in diagnostic cardiovascular testing around the world have led to concerns over the implications of reduced testing for cardiovascular disease (CVD) morbidity and mortality. Methods: Data were submitted to the INCAPS-COVID (International Atomic Energy Agency Non-Invasive Cardiology Protocols Study of COVID-19), a multinational registry comprising 909 institutions in 108 countries (including 155 facilities in 40 U.S. states), assessing the impact of the COVID-19 pandemic on volumes of diagnostic cardiovascular procedures. Data were obtained for April 2020 and compared with volumes of baseline procedures from March 2019. We compared laboratory characteristics, practices, and procedure volumes between U.S. and non-U.S. facilities and between U.S. geographic regions and identified factors associated with volume reduction in the United States. Results: Reductions in the volumes of procedures in the United States were similar to those in non-U.S. facilities (68% vs. 63%, respectively; p = 0.237), although U.S. facilities reported greater reductions in invasive coronary angiography (69% vs. 53%, respectively; p < 0.001). Significantly more U.S. facilities reported increased use of telehealth and patient screening measures than non-U.S. facilities, such as temperature checks, symptom screenings, and COVID-19 testing. Reductions in volumes of procedures differed between U.S. regions, with larger declines observed in the Northeast (76%) and Midwest (74%) than in the South (62%) and West (44%). Prevalence of COVID-19, staff redeployments, outpatient centers, and urban centers were associated with greater reductions in volume in U.S. facilities in a multivariable analysis. Conclusions: We observed marked reductions in U.S. cardiovascular testing in the early phase of the pandemic and significant variability between U.S. regions. The association between reductions of volumes and COVID-19 prevalence in the United States highlighted the need for proactive efforts to maintain access to cardiovascular testing in areas most affected by outbreaks of COVID-19 infection