Lending in a Crisis: Old CEOs Hide, New CEOs Expose
Featuring Prasanna Tantri
A new study finds that, unlike their predecessors, newly appointed bank CEOs are less likely to continue lending to debt-saddled firms.
Display Settings
Display mode
Text size
Listen to this article
Prasanna Tantri
Associate Professor of Finance and the Executive Director at ISB’s Centre for Analytical Finance (CAF). His research focuses on banking, financial inclusion, financial contagion, regulation, and the intersection of politics and finance.
Key Takeaways
- Banks that experience a CEO change during a financial crisis are less likely to extend loans to or restructure the loans of low-quality firms.
- Old CEOs, driven by career incentives, engage in financial cover-ups by continuing to lend to low-quality firms, making financial statements look healthier.