A 2004 credit reform in Brazil simplified the sale of repossessed cars so that the cash could be used as collateral for auto loans. Juliano Assunção, Effi Benmelech, and Fernando Silva show that this change led to larger loans, at longer maturities, and to an expansion of credit to riskier, low-income borrowers. This enabled them to buy newer, more expensive cars, but ultimately led to increased rates of delinquency and default.

Non-commercial-bank institutional investors have taken on larger roles in the corporate lending market over the past decade than they previously held, and these institutions often hold equity in the firms that are borrowing from them. Researchers Jongha Lim, Bernadette Minton, and Michael Weisbach analyze a sample of 11,137 tranches of institutional leveraged loans and find that about 18 percent (2,008) of them have a non-commercial-bank institution that also owns at least 0.1 percent of the firm’s equity. These loan tranches have higher spreads than otherwise similar loan tranches without equity holder participation. The authors find that the interest rate premiums on these loans are higher when the equity-holder’s stake is larger, when the institution's share in the loan is larger, and when the equity holder is a hedge fund or a private equity fund.

Kay Giesecke, Francis Longstaff, Stephen Schaefer, and Ilya Strebulaev analyze data on corporate bond defaults in the United States over the period from 1866 to 2010. The researchers find that corporate default crises have had fewer real effects on the macroeconomy than banking crises. This is despite the fact that in many of the severe corporate default crises, 20 to 50 percent of all corporate bonds defaulted, and the total par amount of corporate bonds often has rivaled the amount of bank loans outstanding,

Pascaline Dupas, Sarah Green, Anthony Keats, and Jonathan Robinson analyze experimental and survey evidence from Western Kenya to better understand how underserved populations view banks and banking. They find that after the fixed cost of opening a basic savings account at a local bank was waived for a random subset of individuals who did not previously use banks, 63 percent of them opened an account but only 18 percent actively used it. Survey evidence suggests that the individuals did not use the bank because they didn't trust it, the withdrawal fees were too high, or the service was poor. When people were provided information about local credit options and the eligibility requirements for an initial small loan were lowered, only 3 percent initiated the loan application process during the next 6 months. When asked why they did not, respondents indicated that they did not want to risk losing their collateral. These results suggest that expanding access to banking services will benefit some people but that broader success may require improving the quality of banking services.

Maria Guadalupe, Hongyi Li, and Julie Wulf explore how the organization of top management in large U.S. firms has changed since the mid-1980s. They find that the number of managers who report directly to the CEO has doubled, but most of them are functional managers, not general managers. As firms focus their businesses, the number of functional managers closer to the product (for example in marketing and R&D) increases. As the firm's IT investments increase, so do the number of functional managers farther from the product, in “administrative” areas, such as finance, law, and HR.