This paper examines the operating efficiency of three types of financial intermediaries in the United States: (1) credit unions, (2) savings and loan associations, and (3) mutual savings banks during the past three decades. In particular, it examines by how much, if any, the operating efficiency of these intermediaries has been enhanced.

The control of profit-making corporations long has been the subject of investigation and discussion, and in recent years same of this interest has shifted to the control of corporations by financial institution. Very little attention has been paid to the control of mutually-owned fiduciaries. This article reports a preliminary investigation of the control of associations in the savings and loan industry.

The question of stock market efficiency has received considerable play in the financial press in recent years and understandably so. Not only is this a topic of interest to national policymakers charged with monitoring and promoting market efficiency, but answers to this question have rather important implications for the management of market participants' portfolios. Our interest in this subject focuses on a subsegment of the larger question of market efficiency, in particular on so-called technical theories of stock market behavior.

M. W. Jones-Lee, A Note on a Property of the Inverse of a Bordered Matrix and Its Implication for the Theory of Portfolio Selection, The Journal of Financial and Quantitative Analysis, Vol. 9, No. 6 (Dec., 1974), pp. 1081-1087

One of the most important innovations in bond financing and in mortgage lending has been the rapid adoption of variable-rate instruments in recent years. Notes and bonds bearing an interest rate between one and two percentage points above the prime rate are becoming common in corporate financing. Similarly, variable-rate mortgages (VRM's) with the interest rate tied to the deposit rate of S&L's or linked to the changing yields on competing investments have spread beyond Florida and California to many states. The Federal Home Loan Bank Board has recently endorsed the variable-rate concept and the Federal Home Loan Mortgage Corporation is preparing guidelines for secondary market operations in VRM's. Portfolio managers are thus taking note of the possibility of acquiring long-term instruments providing some of the resiliency of yields and a measure of real value protection characteristic of short-term issues.

Researchers and political analysts concerned with the inter-regional flow of mortgage funds have often pointed to the existence of yield differentials as prima facie evidence of misallocation of capital and national resources. Limited information and myopic lending horizons, with market imperfections reinforced by state laws and institutional segmentation, have been postulated. They are regarded as responsible for costly “frictions” in the export of capitalto the fast-growing, generally low-income, states, particularly those of the South. Both federal and state legislative action, intensified private arbitrage, and better secondary market facilities and instruments are then urged to improve inter-regional financial mediation to reduce or eliminate the yield differentials.

We study how securities analysts influence managers’ use of different types of earnings management. To isolate causality, we employ a quasi-experiment that exploits exogenous reductions in analyst following resulting from brokerage house mergers. We find that managers respond to the coverage loss by decreasing real earnings management while increasing accrual manipulation. These effects are significantly stronger among firms with less coverage and for firms close to the zero-earnings threshold. Our causal evidence suggests that managers use real earnings management to enhance short-term performance in response to analyst pressure, effects that are not uncovered when focusing solely on accrual-based methods.

This paper documents significantly negative stock price reactions to shareholder-initiated class action lawsuits. We find that shareholders partially anticipate these lawsuits based on lawsuit filings against other firms in the same industry and capitalize part of these losses prior to a lawsuit filing date. We show that the more likely a firm is to be sued, the larger the partial anticipation effect (shareholder losses capitalized prior to a lawsuit filing date) and the smaller the filing date effect (shareholder losses measured on the lawsuit filing date). Our evidence suggests that previous research that typically focuses on the filing date effect understates the magnitude of shareholder losses, and that such an understatement is greater for firms with a higher likelihood of being sued.