The Color of Hedge Fund Activism
50 Pages Posted: 25 Oct 2019 Last revised: 28 Oct 2020
Date Written: October 27, 2020
Banks targeted by hedge fund activism reduces racial disparities in mortgage approval rates and interest rates. However, racial differences in mortgage foreclosure rates do not change, suggesting that the effect is not driven by changes in risk or risk preferences. We find that target banks experience more turnovers of mortgage officers and open new bank branches to address the lending discrimination problem.
Keywords: Hedge Fund Activism, Lending Discrimination, HMDA, Mortgage
JEL Classification: G0, G21, G28, J16
Suggested Citation: Suggested Citation