In this paper I show that surprise monetary policy rate changes causally affect risk premia, exhibit significant post-FOMC announcement drifts, and are driven by both firm and and intermediary specific components. On the firm side, firms with more interest rate mismatch and lower Tobin's Q...

In this paper I study the role of banks in financing the transition to a cleaner economy. I find that as firms become more ESG-focused they increase their use of bond financing relative to bank borrowing. I match newly originated loans to existing bonds to show that the loan-bond spread...

We study the impact of digital banking on the value of the deposit franchise and the stability of the banking sector. Using the classification of digital banking in Koont (2023), we find that when the Fed funds rate increases deposits flow out faster and the cost of deposits increases more in...

Index-tracking fixed-income ETFs have experienced an explosive growth spurt to reach $1 trillion in 2020. However, they suffered significant disruptions during the Covid-19 crisis. We show that bank balance sheet constraints were likely a contributing factor to these disruptions because bond...

Exchange-traded funds (ETFs) are typically viewed as passive index trackers. In contrast, we show that corporate bond ETFs actively manage their portfolios, trading off index tracking against liquidity transformation. In our model, ETFs optimally choose creation and redemption baskets that...

Exchange-traded funds (ETFs) are typically viewed as passive index trackers. In contrast, we show that corporate bond ETFs actively manage their portfolios, trading off index tracking against liquidity transformation. In our model, ETFs optimally choose creation and redemption baskets that...

In this paper, we provide first empirical evidence that peer effects matter for banks' deposit demand. We construct a novel measure that depicts for each county how exposed peers are to a specific bank in a given year. This granularity allows us to tightly identify the causal effect of peer...

We study the impact of digital banking on the value of the deposit franchise and the stability of the banking sector. Using the classification of digital banking in Koont (2023), we find that when the Fed funds rate increases, deposits flow out faster, and the cost of deposits increases more in...

Exchange-traded funds (ETFs) are typically viewed as passive index trackers. In contrast, we show that corporate bond ETFs actively manage their portfolios, trading off index tracking against liquidity transformation. In our model, ETFs optimally choose creation and redemption baskets that...