Information Transmission between Banks and the Market for Corporate Control

Bittner, Christian; Fecht, Falko; Pala, Melissa; Saidi, Farzad

doi:10.2139/ssrn.3990924

Cited by 4 publications

(4 citation statements)

References 33 publications

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“…These findings are in line with our previous results as relationship banks are very likely to have access to M&A related information via their loan monitoring. They are also broadly consistent with recent evidence in Bittner et al (2021) suggesting that German banks share information in their syndicated loan networks around M&A events.…”

Section: Further Results and Robustness Testssupporting

confidence: 89%

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Know Your Customer: Informed Trading by Banks

2022

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Section: Further Results and Robustness Testssupporting

confidence: 89%

“…Consistent with work for the U.S.,Bittner et al (2021) recently provide evidence of information transmission among German banks in syndicated loan networks around M&A events.…”

supporting

confidence: 77%

Know Your Customer: Informed Trading by Banks

2022

View full text Add to dashboard Cite

“…These findings align with our previous results, as relationship banks are very likely to have access to M&A-related information via their loan monitoring. They are also broadly consistent with recent evidence in Bittner et al (2021) suggesting that German banks share information in their syndicated loan networks around M&A events.…”

Section: Further Results and Robustness Testssupporting

confidence: 89%

“…Consistent with work for the U.S.,Bittner et al (2021) recently provide evidence of information transmission among German banks in syndicated loan networks around M&A events.…”

supporting

confidence: 77%

Know Your Customer: Informed Trading by Banks

Haselmann¹,

Leuz²,

Schreiber³

2022

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This study analyzes information production and trading behavior of banks with lending relationships. We combine trade-by-trade supervisory data and credit-registry data to examine banks' proprietary trading in borrower stocks around a large number of corporate events. We find that relationship banks build up positive (negative) trading positions in the two weeks before events with positive (negative) news, even when these events are unscheduled, and unwind positions shortly after the event. This trading pattern is more pronounced when banks are likely to possess private information about their borrowers and cannot be explained by specialized expertise in certain industries or firms. The results suggest that banks' lending relationships inform their trading and underscore the potential for conflicts of interest in universal banking-a prominent concern in the regulatory debate for a long time. Our analysis also illustrates how combining large data sets can enhance the supervision of markets and financial institutions.

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Separating Ownership and Information

Voss

Kulms²

2022

American Economic Review

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This paper identifies an upside of the separation of ownership and control, typically the source of inefficiencies in the theory of the firm. Because insiders obtain private information by exercising control, the separation of ownership and control leads to a separation of ownership and information. We show that this separation is necessary for efficient trade in the market for corporate control. The analysis reveals how strategic communication between inside and outside shareholders facilitates takeovers by eliciting external bidders’ private information. Our results call into question mandatory disclosure requirements during takeovers. (JEL D21, D82, G32, G34)

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Information Transmission between Banks and the Market for Corporate Control

Cited by 4 publications

References 33 publications

Know Your Customer: Informed Trading by Banks

Know Your Customer: Informed Trading by Banks

Know Your Customer: Informed Trading by Banks

Separating Ownership and Information

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