Do Institutional Investors Know Banks Better? Evidence from Institutional Trading Surrounding the 2008 Financial Crisis

Author(s):  
Wei-Ling Song ◽  
Hui (Hillary) Wang
2019 ◽  
Vol 35 (4) ◽  
pp. 777-802
Author(s):  
Wei-Ling Song ◽  
Hui (Hillary) Wang

The catastrophic economic damage caused by the 2008 financial crisis was unprecedented and caught many market participants by surprise. It raises the question: To what extent do institutional investors play a monitoring role in the banking industry? In this article, we investigate this underresearched area and provide evidence that gray institutions (i.e., banks and insurance companies) have more information about banks’ risk exposure to securitization than independent institutions do (e.g., investment companies and public pension funds) as gray institutions shied away from banks holding more private-label mortgage-backed securities or issuing riskier securitization deals before the crisis. We also find that the trading of gray institutions before the crisis can predict high-exposure banks’ abnormal returns around the Lehman Bankruptcy and subsequent 1-year stock performance. The trades of gray institutions are also significant and positively related to such banks’ operating performance during the crisis period.


Author(s):  
Michael Harris

What do pure mathematicians do, and why do they do it? Looking beyond the conventional answers, this book offers an eclectic panorama of the lives and values and hopes and fears of mathematicians in the twenty-first century, assembling material from a startlingly diverse assortment of scholarly, journalistic, and pop culture sources. Drawing on the author's personal experiences as well as the thoughts and opinions of mathematicians from Archimedes and Omar Khayyám to such contemporary giants as Alexander Grothendieck and Robert Langlands, the book reveals the charisma and romance of mathematics as well as its darker side. In this portrait of mathematics as a community united around a set of common intellectual, ethical, and existential challenges, the book touches on a wide variety of questions, such as: Are mathematicians to blame for the 2008 financial crisis? How can we talk about the ideas we were born too soon to understand? And how should you react if you are asked to explain number theory at a dinner party? The book takes readers on an unapologetic guided tour of the mathematical life, from the philosophy and sociology of mathematics to its reflections in film and popular music, with detours through the mathematical and mystical traditions of Russia, India, medieval Islam, the Bronx, and beyond.


2012 ◽  
Author(s):  
Ivelina Pavlova ◽  
Ann Marie Hibbert ◽  
Joel R. Barber ◽  
Krishnan Dandapani

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