We estimate the impact of a poor bank examination rating on the growth rates of individual bank loan portfolios. We use a novel approach to control for loan demand variation and estimate a fixed-effect model using an unbalanced panel with over 381,000 bank-quarter observations from the period 1994–2011. Our estimates show that a poor examination rating has a large negative impact on bank loan growth, even after controlling for the impact of monetary policy, bank capital and liquidity conditions, and any voluntary reduction in lending triggered by weak legacy loan portfolio performance or other bank losses. This previously unidentified effect is consistent with the hypothesis that the bank supervision process successfully constrains the lending activities of banks operating in an unsafe and unsound manner.

This study examines whether the implementation of a mature enterprise risk management (ERM) framework by property and liability insurers improved their resilience in the face of the COVID-19 pandemic. To address the potential problem of endogeneity, we analyze a panel dataset of listed property and liability insurers from around the world using the propensity score matching method. Subsequently, a two-step “doubly robust” estimation method is employed. The results reveal that the performance of insurers with less mature ERM frameworks was adversely affected by the pandemic but that of insurers with more mature ERM frameworks was not. These findings remain consistent after conducting various robustness checks. Separate consideration of each ERM component reveals that no component independently enhanced insurers' resilience; rather, the components collectively enhanced their resilience. Overall, this study provides valuable insights for insurers and regulators aiming to enhance the industry's ability to withstand future challenges.