The Harvard Law School Forum on Corporate Governance https://corpgov.law.harvard.edu The leading online blog in the fields of corporate governance and financial regulation. Fri, 08 May 2026 11:32:19 +0000 en-US hourly 1 https://wordpress.org/?v=6.5.8 https://corpgov.law.harvard.edu/wp-content/uploads/2024/02/cropped-photography-4-e1706898544564-1-32x32.png Private Equity and Financial Fragility During the Crisis – The Harvard Law School Forum on Corporate Governance https://corpgov.law.harvard.edu 32 32 Private Equity and Financial Fragility During the Crisis https://corpgov.law.harvard.edu/2017/08/21/private-equity-and-financial-fragility-during-the-crisis/?utm_source=rss&utm_medium=rss&utm_campaign=private-equity-and-financial-fragility-during-the-crisis https://corpgov.law.harvard.edu/2017/08/21/private-equity-and-financial-fragility-during-the-crisis/#comments Mon, 21 Aug 2017 13:02:44 +0000 https://corpgov.law.harvard.edu/?p=100868?d=20170821090244EDT Posted by Shai Bernstein, Stanford Graduate School of Business, on Monday, August 21, 2017
Editor's Note:

Shai Bernstein is Assistant Professor of Finance at Stanford Graduate School of Business. This post is based on a recent paper by Professor Bernstein; Josh Lerner, Jacob H. Schiff Professor of Investment Banking at Harvard Business School; and Filippo Mezzanotti, Assistant Professor of Finance and Donald P. Jacobs Scholar at the Kellogg School of Management. 

The recent global financial crisis increased the attention paid by policy makers, regulators, and academics to financial stability. While much attention has been devoted to deficiencies in the banking system, high levels of corporate debt have also triggered concerns. Highly leveraged firms may enter financial distress during a crisis, exacerbating cutbacks in investment and employment and contributing to the persistence of the downturn. As such, the practices of the private equity (PE) industry, which raised close to $2 trillion in equity before the crisis, raised significant concerns.

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