Bank monitoring with on-site inspections

Abstract

working paper series bank monitoring with on-site inspections amanda rae heitz federal deposit insurance corporation and tulane university christopher martin federal deposit insurance corporation alexander ufier federal deposit insurance corporation august 2022 last updated: july 2023 previously circulated as “bank monitoring in construction lending” fdic cfr wp 2022-09 fdic.gov/cfr the center for financial research (cfr) working paper series allows cfr staff and their coauthors to circulate preliminary research findings to stimulate discussion and critical comment. views and opinions expressed in cfr working papers reflect those of the authors and do not necessarily reflect those of the fdic or the united states. comments and suggestions are welcome and should be directed to the authors. references should cite this research as a “fdic cfr working paper” and should note that findings and conclusions in working papers may be preliminary and subject to revision. bank monitoring with on-site inspections july 20, 2023 amanda rae heitz, fdic and tulane university, aheitz@tulane.edu christopher martin, fdic, chrmartin@fdic.gov alexander ufier, fdic, aufier@fdic.gov while theoretical papers have emphasized the importance of bank loan monitoring, empirical papers have struggled to validate these theories, largely due to limited data availability. using a proprietary transaction-level database of nearly 30,000 multiple-draw construction loans, we empirically examine the determinants …

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