We start by considering some of the key reasons behind the academic and industry interest in robo-advisors. We discuss how robo-advice could potentially address some fundamental problems in investors’ decision making as well as in traditional financial advice. We then move on to some of the...

Cyclical systemic risk arises when macro-financial imbalances accumulate over time. Past financial crises which occurred in several countries around the world have shown that heightened cyclical risk can lead to exorbitant economic and financial costs if the appropriate macroprudential policies...

We provide a first look into the drivers of household cryptocurrency investing. Analyzing consumer transaction data for millions of U.S. households, we find that, except for high income early adopters, cryptocurrency investors resemble the general population. These investors span all income...

We estimate the impact of household liquidity provision on macroeconomic stabilization using the 2020 CARES Act mortgage forbearance program. We leverage intermediation frictions in forbearance induced by mortgage servicers to identify the effect of reducing short-term payments with little...

Credit rating is determined by a borrower's credit risk, but can the rating in itself change a borrower's credit risk in an economically meaningful manner? Despite the theoretical and practical importance of this question, there is limited empirical evidence on this topic since it is hard to...

We find evidence that banks respond to increasing non-bank competition in the post-2012 conforming residential mortgage market by making use of their balance sheet financing capability. Loan retention decision post 2012 is in stark contrast with that before 2012 when nonbank competition was only...

This study examines the impact of air pollution on a frequent financial decision that is cognitively less demanding. Using data from a leading P2P lending platform in China, we find that borrowers are more likely to miss their repayments when the scheduled repayment days witness heavier air...

Target Date Funds (TDFs) are designed to provide unsophisticated or inattentive investors with age-appropriate exposures to different asset classes like stocks and bonds. The rise of TDFs has moved a significant share of retirement investors into macro-contrarian strategies that sell stocks...

The past decade has witnessed a phenomenal rise of digital wallets, and the COVID-19 pandemic further accelerated their adoption globally. Such e-wallets provide not only a conduit to external bank accounts but also internal payment options, including the ever-popular Buy-Now-Pay-Later (BNPL)....

It has been 5 years since robo-advisors were first introduced in Korea in 2016. As of the end of June 2021, the number of subscribers recorded a rapid increase over the past year and recorded 380,000, and the amount of managed assets continued to increase, but as of the end of June 2021, it was...