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Banks vs. Firms: Who Benefits from Credit Guarantees?

Alberto Martin,Sergio Mayordomo, Victoria Vanasco   Nov 14,2023

Working Paper No.00108-01

Governments often support private credit through guarantee schemes, which compen-sate private lenders in the event of borrower default. A key... Read More

Falling Interest Rates and Credit Reallocation: Lessons from General Equilibrium

Alberto Martin,Alejandro Van der Gothe,Luc Laeven, Victoria Vanasco , Vladimir Asriyan   Nov 15,2023

Working Paper No.00107-01

We show that in a canonical model with heterogeneous entrepreneurs, financial frictions, and an imperfectly elastic supply of capital, a... Read More

Market opacity and fragility: Why liquidity evaporates when it is most needed

Giovanni Cespa, Xavier Vives   Dec 04,2023

Working Paper No.00131-00

We show that, consistent with empirical evidence, access to order flow information allows traders to supply liquidity via contrarian marketable... Read More

The Short-Termism Trap: Catering to Informed Investors with Limited Horizons

James Dow , Jungsuk Han Francesco Sangiorgi   Dec 15,2023

Working Paper No.00132-00

Does the stock market exert short-term pressure on listed firms, do they respond, and is this response value reducing? We... Read More

Published: Journal of Financial Economics, 2024, (), -

Central Bank Digital Currency and Financial Stability

Peter Hoffmann,Agnese Leonello,Davide Porcellacchia, Toni Ahnert   Dec 20,2023

Working Paper No.00100-03

What is the effect of Central Bank Digital Currency (CBDC) on financial stability? We answer this question by studying a model... Read More

The Tokenomics of Staking

Zhiheng He,Ke Tang, Lin William Cong (叢林)   Dec 30,2023

Working Paper No.00134-00

Blockchain-based platforms and decentralized finance prominently features ``staking'': Besides offering a convenience yield for transactions as digital media of exchange,... Read More

Market Integration, Risk-Taking, and Income Inequality

Ron Kaniel , Yizhou Xiao Lin William Cong (叢林)   Dec 30,2023

Working Paper No.00136-00

A pandemic or nationalism can dial back global integration as much as advancements in IT and transportation spur it. We... Read More

Equilibrium Staking Levels in a Proof-of-Stake Blockchain

Kose John,Thomas Rivera, Fahad Saleh   May 24,2022

Working Paper No.00076-00

We study the equilibrium level of staking in a Proof-of-Stake blockchain when investors have different trading horizons. We find that,... Read More

Intermediation via Credit Chains

Jian Li. , Zhiguo He   Jun 03,2022

Working Paper No.00078-00

The modern financial system features complicated financial intermediation chains, with each layer performing a certain degree of credit/maturity transformation. We... Read More

Algorithmic Pricing and Liquidity in Securities Markets

Thierry Foucault,Stefano Lovo, Jean-Edouard Colliard   Oct 27,2022

Working Paper No.00081-00

We let “Algorithmic Market-Makers” (AMMs), using Q-learning algorithms, choose prices for a risky asset when their clients are privately informed... Read More