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Published: Journal of Financial Economics, 2024

Keshav Dogra, Keeyoung Rhee | Working Paper No. 00218-00

Stress Tests and Model Monoculture

We study whether regulators should reveal stress test results that contain imperfect information about banks' financial health. Although disclosure restores market confidence in banks, it misclassifies some healthy banks as risky. This encourages banks to choose portfolios deemed safe by...

Published: Journal of Finance, 2024

Yeon-Koo Che, Chongwoo Choe, Keeyoung Rhee | Working Paper No. 00217-00

Bailout Stigma

We develop a model of bailout stigma in which accepting a bailout signals a firm's balance-sheet weakness and reduces its funding prospects. To avoid stigma, high-quality firms withdraw from subsequent financing after receiving bailouts or refuse bailouts altogether to send...

Uploaded: Apr 15, 2026

Dongkyu Chang, Keeyoung Rhee, Aaron Yoon | Working Paper No. 00214-00

Capital Structure and ESG Integration: A Security-Design Approach

We analyze how borrowers’ capital structure affects their incentives to integrate ESG. Borrowers may undertake socially valuable but financially underperforming projects when doing so lowers expected repayments to outside investors. This repayment saving is larger under more repayment-sensitive securities—such as...

Uploaded: Apr 15, 2026

Dongkyu Chang, Kyoung Jin Choi, Keeyoung Rhee | Working Paper No. 00213-00

(In-)Visible Risks of Blockchain-Based Financing for Capital Allocation Efficiency

We analyze how blockchain-based financing affects capital allocation to provide early guidance for DeFi regulation. Competition with conventional financial firms raises borrowing costs, incentivizing DeFi firms to shirk their responsibility for managing investors’ funds. While blockchain technology enables collective monitoring,...

Published: Journal of Finance, 2024

Brendan Daley, Thomas Geelen, Brett Green | Working Paper No. 00211-00

Due Diligence

Due diligence is common practice prior to the execution of large transactions. We propose a model of due diligence and analyze its effect on prices, payoffs, and deal completion. In our model, if the seller accepts an offer, the acquirer...

Published: Journal of Financial Intermediation, 2024

Cecilia Parlatore | Working Paper No. 00210-00

​Transparency and Bank Runs

In a banking model with imperfect information, I find that more precise information increases the economy's vulnerability to bank runs. For low transparency levels, depositors cannot distinguish bad from good states based on their private signals and, absent liquidity shocks,...