Tag Archives: denis sosyura

Bailed-out Banks Issued Riskier Loans

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ANN ARBOR, Mich.—Banks that received federal bailout money ended up approving riskier loans and shifting capital toward risky investments after getting government help, say University of Michigan researchers.

In a new study on risk-taking by banks that received funds from the Troubled Asset Relief Program, finance professors Ran Duchin and Denis Sosyura of Michigan’s Ross School of Business found that the overall risk level of TARP banks increased 10 percent. Further, these banks were no more likely to issue loans, overall, than non-TARP banks, in contrast to the declared objective of the federal program to increase lending. (more…)

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Firms Use Media Coverage to Influence Merger Negotiations

By Economy, Media, , , , , , , , , , , , , ,

ANN ARBOR, Mich.— Companies involved in merger talks manipulate their stock prices during negotiations by releasing more news than usual, according to a University of Michigan study.

“Media coverage has a significant effect on stock trading and returns,” said Kenneth Ahern, assistant professor of finance at U-M’s Ross School of Business. “Even stale news, if widely publicized, can dramatically raise short-term returns and influence prices of large and widely followed stocks in the S&P 500.”

In their study, “Who Writes the News? Corporate Press Releases during Merger Negotiations,” Ahern and Ross School colleague Denis Sosyura examined more than 500 completed stock mergers of large U.S. publicly traded firms from 2000 to 2008. They studied the frequency and content of news releases issued by acquiring firms, and analyzed more than 617,000 articles in 421 newspapers and newswires worldwide. (more…)

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