Regulatory and media concern has focused heavily on the potentially manipulative distortion of market prices associated with naked short selling. However, naked shorting can also have beneficial effects for liquidity and pricing efficiency. We empirically investigate the impact of naked...

There is an increasing concern that fast trading firms magnify adverse selection costs and illiquidity by picking off stale quotes. This article investigates the effects of banning proprietary traders from liquidity taking on the banned and the market overall. The fast arbitrageur exited the...

Congress passed the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) on July 21, 2010, which became effective for shareholder meetings held on, or after January 21, 2011. The Dodd-Frank Act requires U.S. public companies to conduct an initial advisory, non-binding vote...

This paper examines market liquidity in the post-crisis era in light of concerns that regulatory changes might have reduced dealers' ability and willingness to make markets. We begin with a discussion of the broader trading environment, including an overview of regulations and their potential...

This paper examines market liquidity in the post-crisis era in light of concerns that regulatory changes might have reduced dealers' ability and willingness to make markets. We begin with a discussion of the broader trading environment, including an overview of regulations and their potential...

This paper introduces a two-step strategy, the synthetic control method combined with the difference-in-differences method, to evaluate the effectiveness of the Dodd-Frank Act (DFA). We find no evidence from our counterfactual analysis in support of the DFA reducing systemic risk in the US...

Many, if not most, accounts of the financial crisis of 2008 include a prominent role for the U.S. residential mortgage market. While other U.S. property markets, such as commercial and retail, exhibited similar boom and bust patterns, the elevated level of defaults and associated costs borne by...

In July 2002, FINRA began mandatory dissemination of price and volume information for corporate bond trades. This paper, using recently released data, measures transparency's effect on trading activity and costs for the entire corporate bond market. Even though trading costs decrease...