Using firm-level data for approximately 1,000 bank and nonbank financial institutions in 22 countries over the past 15 years we study the impact of prolonged monetary policy easing on risk-taking behavior. We find that the leverage ratio, as well as other measures of firm-level vulnerability,...

We provide empirical evidence of the causal effects of changes in financial intermediaries' net worth on the aggregate economy. Our strategy identifies financial shocks as high-frequency changes in the market value of intermediaries' net worth in a narrow window around their earnings...

This paper analyzes whether and how central banks can use currency options to lower exchange rate volatility and maintain (implicit) target zones in foreign exchange markets. It argues that selling rather than buying options will result in market makers dynamically hedging their long option...

In this paper, I review some selected literature about or related to the monetary neutrality and show that specific aspects of the monetary (non-)neutrality are actually derived from the underlying welfare consideration and thus their validity or desirability depend on the current state and way...

We show that a policy rate cut lengthens corporate debt maturity. A 1 standard deviation (10 basis points, b.p.) expansionary interest rate shock raises the share of long-term debt by 87 b.p., explaining about 20% of its variation. Moreover, we show that only large, bond-issuing firms adjust. A...

This paper investigates how conventional monetary policy shocks influence corporate financing decisions. We find that low-risk firms (i.e., firms with low debt burdens) respond more positively in increasing leverage ratios when the Federal Open Market Committee cuts interest rates. These firms...

Over the past two decades, banks have increasingly focused on offering contingent credit in the form of credit lines as a primary means of corporate borrowing. We review the existing body of research regarding the rationales for banks' provision of liquidity insurance in the form of credit...

This paper investigates the impact of unconventional monetary policy on firm financial constraints. It focuses on the Federal Reserve's maturity extension program (MEP), intended to lower longer-term rates and flatten the yield curve by reducing the supply of long-term government debt....

This paper investigates the impact of unconventional monetary policy on firm financial constraints. It focuses on the Federal Reserve's maturity extension program (MEP), intended to lower longer-term rates and flatten the yield curve by reducing the supply of long-term government debt....

The provision of trade credit has been explained both by theories that focus on its role in contracting for transactions between firms and by theories that focus on the advantages of liquidity provision along the supply chain. We use the 2007-2009 financial crisis and recession as a natural...