The Federal Deposit Insurance Corporation Improvement Act event in the bank commercial loan market

Article Abstract:

Keywords: Accounting research, Banking, Legislation, Risk, Rate of interest, USA Unlike four previous major banking acts, the Federal Deposit Insurance Corporation Improvement Act (FDICIA) raised bank commercial loan information production costs. After adjusting for funding expenses, default risk expectations, and bank size, we find that the FDICIA was a significant event in the commercial loan market. This study shows that the FDICIA had a significant, positive effect on middle market ($1,000-$1 million) loan rates and a negative effect on very large ($10 million and over) loan interest rates. An alternative hypotheses attributing increased loan rates to realized loan losses is tested and rejected.

United States, Research, Finance

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Religious texts, moral prescriptions and economy: the case of interest

Article Abstract:

The prohibition against usury and moneylending runs strong in both the Christian and Islamic faiths. However, the Christian Church in Europe was able to resolve the contradiction between usury and business practice in the late medieval period, a development that would allow banking to eventually become acceptable in the West. In Muslim countries, on the other hand, the absolute bar against interest has not permitted clerics and theologians to ever surmount their religious objections to usury, leading to the widespread belief among traditional muslims that moneylending is immoral.

Analysis, Religious aspects, Interest, Interest (Finance), Bank loans, Islamic economics, Islamic theology

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