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Full-Text Articles in Finance and Financial Management
Auditor Response To Changing Risk: Money Market Funds During The Financial Crisis, Kyle D. Allen, Drew B. Winters
Auditor Response To Changing Risk: Money Market Funds During The Financial Crisis, Kyle D. Allen, Drew B. Winters
Finance Faculty Publications and Presentations
Audits provide monitoring for investors. The collapse of markets across the financial crisis made assets more difficult to value, which increased risk for auditors. The money markets were at the center of the financial crisis increasing audit engagement risk on money market funds, which at the time of the crisis were highly opaque. Measuring the response to increased engagement risk with audit fees, this study finds that auditors increase their fees for the riskiest class of funds. However, no evidence was found that audit fees increased as funds increased their holdings in the riskiest class of securities.
Home Price Appreciation And Residential Lending Standards, Yongjia Li, Salman Tahsin
Home Price Appreciation And Residential Lending Standards, Yongjia Li, Salman Tahsin
Finance Faculty Publications and Presentations
We explore the effect of home price appreciation on residential lending standards in the U.S. across different sample periods. Using housing supply elasticity measures as instrumental variables for home price changes, we find that rising home prices led to easing lending standards between 2001 and 2006. Mortgage acceptance rates increased more in MSAs that experienced higher home price appreciation, contributing to the credit boom. However, we find that home price appreciation is associated with tighter lending standards between 2012 and 2016, suggesting that banks took a more cautious view of home price appreciation after the financial crisis. To study the …
Crisis Regulations: The Unexpected Consequences Of Floating Nav For Money Market Funds, Kyle D. Allen, Drew B. Winters
Crisis Regulations: The Unexpected Consequences Of Floating Nav For Money Market Funds, Kyle D. Allen, Drew B. Winters
Finance Faculty Publications and Presentations
From the inception of money market funds (MMFs), all MMFs reported a fixed $1 NAV (Net Asset Value). In July 2014, the Securities and Exchange Commission (SEC) issued new regulations for MMFs that require Prime institutional MMFs to report floating NAVs. The SEC did not expect a significant impact on the MMF industry from requiring floating NAVs for Prime institutional funds. We find that over 70% of the assets under management in Prime MMFs left Prime funds with over half the Prime funds closing. We find that more than half of the Prime retail MMFs (which are not required to …