The U.S. banking holiday of March 1933 was a pivotal event in twentieth-century political and economic history. After closing the nation's banks for nine days, the administration of newly inaugurated president Franklin D. Roosevelt restarted the banking system as the first step toward national recovery from the global Great Depression. In the conventional narrative, the holiday succeeded because Roosevelt used his political talents to restore public confidence in the nation's banks. However, such accounts say virtually nothing about what happened during the holiday itself. We reinterpret the banking crises of the 1930s and the 1933 holiday through the lens of bank supervision, the continuous oversight of commercial banks by government officials. Through the 1930s banking crises, federal supervisors identified troubled banks but could not act to close them. Roosevelt empowered supervisors to act decisively during the holiday. By closing some banks, supervisors made credible Roosevelt's claims that banks that reopened were sound. Thus, the union of FDR's political skills with the technical judgment of bank supervisors was the key to solving the banking crisis. Neither could stand alone, and both together were the vital precondition for further economic reforms—including devaluing the dollar—and, with them, Roosevelt's New Deal.

The market failures approach (MFA) to business ethics argues that economic theory regarding the efficient workings of a market can generate normative prescriptions for managerial behaviour. It argues that actions that inhibit Pareto optimal solutions are immoral. However, the approach fails to identify goods that should be regulated or prohibited from the market, something common to the moral limits to markets (MLM) approach to business ethics. There are, however, numerous assumptions underlying Paretian efficiency, including some about the preferences of market participants. Trade in some goods violates some of these assumptions, and so these goods are morally suspect and can be understood to indicate that the market for these goods is not moral. This creates grounds sufficient for regulating, and possibly prohibiting, these goods. To help determine whether it is then necessary to regulate the goods, I propose a supplementary economic analysis to ascertain why an assumption regarding a particular preference is being violated.

Foreign migration flows have important stock market consequences. Foreign-born resident networks within U.S. Metropolitan Statistical Areas (MSAs) are associated with excess return comovement between locally headquartered stocks and American Depositary Receipts (ADRs) from countries with ties to the MSA through the network of foreign-born residents. This comovement is hardly due to correlated fundamentals and at least partially driven by correlated trading within members of a common investor base consisting of foreign-born residents. Our evidence has implications for both investors and foreign multinational corporations (MNCs) seeking to reap benefits from cross-listings and is consistent with the notion that foreign-born residents exhibit both local bias and home (country) bias.

We show that high cash holdings can be used by executives in the ex post bargaining over their compensation. Cash holdings are positively associated with CEO compensation and is driven by non-salary components. In companies with weaker governance, this relation is more pronounced. Using exogenous shocks to the firm’s cash, we show that CEO compensation readily responds to increases in cash holdings, confirming that managers are able to derive personal benefits from excess cash holdings.

This article makes the case for a ‘holistic’ approach to human rights due diligence, arguing that such a standard must be interpreted in the light of mutually reinforcing principles of environmental law, climate law and human rights law. Through a review of emerging climate change-related litigation, it shows how a concept of ‘climate due diligence’ is gradually consolidating. Building on the United Nations Guiding Principles on Business and Human Rights, the article explores climate due diligence both as a standard of conduct and as a business process, presenting its main features. It argues that corporations should integrate climate due diligence into their processes and policies to be best prepared for likely regulatory and judicial developments, such as the upcoming European Union’s regulation on human rights and environmental due diligence.

Discount rates affect stock prices directly via the discount-rate channel or indirectly via the cash-flow channel because expected future cash-flow growth varies with the discount rate. The traditional Macaulay duration captures the effect from the discount-rate channel. I propose a novel duration measure, the effective equity duration, to capture the effects from both channels. I estimate it around unexpected policies in the federal funds rates. I find that the equity yield curve is hump-shaped because expected future cash-flow growth increases with the discount rate. The effective equity duration captures information other than monetary policy risk.

We use new hand-collected data from corporate filings to study the drivers of corporate capital structure adjustment. Classifying firms by their adjustment frequencies, we reveal previously unknown patterns in their reasons for financing and the financial instruments used. Some are consistent with existing theory, whereas others are understudied. Many leverage changes are outside of the firm’s control (e.g., executive option exercise) or incur negligible adjustment costs (e.g., credit-line usage). This implies a lower frequency of proactive leverage adjustments than indicated by prior research using accounting data, suggesting that costs of adjustment are higher, or the benefits lower, than previously thought.