Hamid Mehran
Hamid Mehran served as a staff economist in the Research & Statistics Group of the Federal Reserve Bank of New York. Dr. Mehran has taught at Carroll School of Management at Boston College, Columbia Business School, the Kellogg Graduate School of Management at Northwestern University, MIT Sloan School of Management, and the Wharton School of the University of Pennsylvania. He was a research associate at Hewitt Associates and a fellow of the Wharton Financial Institutions Center. His research interest is in corporate finance. He has written widely on the governance of banks and served as guest editor of the Journal of Financial Intermediation special issue “Corporate Governance in the Banking and the Financial Services Industries.” He also edited two special issues of Economic Policy Review: “Corporate Governance: What Do We Know, and What Is Different about Banks?” and “Behavioral Risk Management in the Financial Services Industry: The Role of Culture, Governance, and Financial Reporting.”
Regulation
Short Selling and the Regional Bank Crisis
Capital markets are central to capitalism and the functioning of the US economy. Yet, short-selling, an integral part of price discovery in capital markets, has been blamed as a contributor to the recent banking crisis. Lawmakers and interest groups have labeled short sellers opportunists who prey on small investors and the public without justification. The authors shed light on this debate and question the merit of the allegations.
Commentary
Stop Blaming Short Sellers for the Banking Crisis
To what degree did banks’ equity price declines trigger deposit withdrawals at recently failed banks? To what degree did the withdrawals trigger declining bank equity prices? Hamid Mehran and Chester Spatt note that in either case, short-selling is not to blame and is, in fact, an essential part of a well-functioning market.
Regulation
Defer Bank Management’s Compensation for Times of Crisis
Adopting a deferred pay scheme for bank managers would provide them with needed funding during a downturn and would incentivize more conservativism when it comes to risk-taking.
Commentary
How Financial Contracting Could Help the Police Force Manage Its Aims More Effectively
Hamid Mehran proposes funded deferred pay, an incentive structure to mitigate the risk and costs of police misconduct.
News
Fear of Punishment Distorts Bank Financial Reporting
When bank employees are afraid of punishment from regulators, they are likely to conceal information about their faulty decisions. This in turn...
News
Why Financial Regulations Might Fail to Produce Their Desired Outcome: The Case of the Capital Conservation Buffer
The capital conservation buffer (CCB) was created after the 2008 financial crisis, instructing banks to retain their dividends in an escrow account and...
Latest news
Antitrust and Competition
Revising Guideline 6 With Evidence To Establish a Structural Inference for Input Foreclosure
Vertical merger law lacks the structural presumption of horizontal merger law, which shifts the burden from the government to the merging parties to provide evidence that a merger will not produce anticompetitive effects when it is known that the merger will substantially increase market concentration. To improve Guideline 6 of the draft Merger Guidelines concerning vertical foreclosure, Steven Salop develops a three-factor criteria with which the government antitrust agencies can show an analogous structural “inference” that shifts the burden of evidence to the merging parties.
Antitrust and Competition
How US Antitrust Enforcement Against Xerox Promoted Innovation by Japanese Competitors
Xerox invented modern copier technology and was so successful that its brand name became a verb. In 1972, U.S. antitrust authorities charged Xerox with monopolization and eventually ordered the licensing of all its copier-related patents. As new research by Robin Mamrak shows, this antitrust intervention promoted subsequent innovation in the copier industry, but only among Japanese competitors. Nevertheless, their innovations benefited U.S. consumers.
Antitrust and Competition
Revising the Merger Guidelines To Return Antitrust to a Sound Economic and Legal Foundation
The draft Merger Guidelines largely replace the consumer welfare standard of the Chicago School with the lessening of competition principle found in the 1914 Clayton Act. This shift would enable the Federal Trade Commission and Department of Justice Antitrust Division to utilize the full extent of modern economics to respond to rising concentration and its harmful effects, writes John Kwoka.
Economic History
How Anthony Downs’s Analysis Explains Rational Voters’ Preferences for Populism
In new research, Cyril Hédoin and Alexandre Chirat use the rational-choice theory of economist Anthony Downs to explain how populism rationally arises to challenge established institutions of liberal democracy.
Antitrust and Competition
The Impact of Large Institutional Investors on Innovation Is Not as Positive as One Might Expect
In a new paper, Bing Guo, Dennis C. Hutschenreiter, David Pérez-Castrillo, and Anna Toldrà-Simats study how large institutional investors impact firm innovation. The authors find that large institutional investors encourage internal research and development but discourage firm acquisitions that would add patents and knowledge to their firms’ portfolios, hampering overall innovation.
Antitrust and Competition
The FTC Needs To Focus Arguments on Technological Transitions After High-Profile Losses
Joshua Gray and Cristian Santesteban argue that the Federal Trade Commission's focus in Meta-Within and Microsoft-Activision on narrow markets like VR fitness apps and consoles missed the boat on the real competition issue: the threat to future competition in nascent markets like VR platforms and cloud gaming.
Commentary
We Need Better Research on the Relationship Between Market Power and Productivity in the Hospital Industry
Antitrust debates have largely ignored questions about the relationship between market power and productivity, and scholars have provided little guidance on the issue due to data limitations. However, data is plentiful on the hospital industry for both market power and operating costs and productivity, and researchers need to take advantage, writes David Ennis.
