We examine market making behavior of dealers for 55,988 corporate bonds, many of which trade infrequently. Dealers have a substantially higher propensity to offset trades within the same day rather than committing capital for longer periods for riskier and less actively traded bonds. Dealers'...

Nonbank lenders have been playing an increasing role in supplying debt, especially after the Great Recession. How important are the distortions in the greater regulation of banks that differentially limit risk-taking across alternative providers of credit? How might the growing role of nonbanks...

The traditional model of bank-led financial intermediation, where banks issue demandable deposits to savers and make informationally sensitive loans to borrowers, has seen a dramatic decline since 1970s. Instead, private credit is increasingly intermediated through arms-length transactions, such...

In recent years, assets of non-bank financial intermediaries (NBFIs) have grown significantly relative to those of banks. These two sectors are commonly viewed either as operating in parallel, performing different activities, or as substitutes, performing substantially similar activities, with...

We analyze the effect of a major central bank digital currency (CBDC) - the digital euro - on the payment industry to find remarkably heterogeneous effects. Stock prices of U.S. payment firms decrease, while stock prices of European payment firms increase in response to positive announcements on...

This paper investigates the effect of interest rate changes on the U.S. banks’ performance captured by unrealized losses, investment securities allocation, and deposit withdrawal. We show that a sudden surge in interest rates could lead to massive losses, potentially erasing the market value...

The US mortgage market is of paramount economic and financial importance. While the causes of the Global Financial Crisis (GFC) remain a subject of vigorous debate, lax lending standards and opacity surrounding innovations in securitization are often cited as central issues. A decade following...

We evaluate the performance of limited partners' (LPs) private equity investments over time. Using a sample of 14,380 investments by 1,852 LPs in 1,250 buyout and venture funds started between 1991 and 2006, we find that the superior performance of endowment investors in the 1991-1998 period,...

The literature examining analyst activity assumes that access to management is valued by analysts and their employers. We propose a readily observable measure of access: how often an analyst is invited to be among the first to ask questions in the Q&A session of an earnings conference call....

A number of academic papers have indicated that returns for private equity funds, on average, have not outperformed public equities in the United States. This contradicts the risk premium one might expect with private equity, given the liquidity, transparency limitations, and additional...