SFI Professor Rüdiger Fahlenbrach from the École Polytechnique Fédérale de Lausanne, together with fellow researchers Robert Prilmeier, Tulane University, and René Stulz, The Ohio State University, investigate the loan growth and subsequent financial returns of US publicly listed banks between 1972 and 2014. Their results show that banks that grow quickly make loans that perform worse than the loans of other banks in the three years following the high-growth period and that these results hold independently of economic cycles. Florian Esterer from Bank J. Safra Sarasin explains the researchers’ results by using a microeconomic analysis of the banking market.

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