We examine the relationship between equity risk and the use of financial derivatives with a sample of 555 banks from eighteen developed markets from 2006 to 2015. Our main findings suggest that banks' use of financial derivatives increased their risk. This increase in risk can be driven by...

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...

The paper investigates how the characteristics of the distribution network and the affiliation to a banking group affect mutual funds performance exploiting a unique dataset with extremely detailed information on funds' portfolios and bank-issuer relationships for the period 2006-2017. We find...

In this paper we analyze the trading patterns of a large number of institutional investors in the UK. We expect these investors to time their trades and the buy (sell) trades to lead to positive (negative) post-event returns. On average, share prices increase significantly on the announcement of...

This paper derives analytical solutions for valuing credit default swaps (CDS) using preference-free multifactor affine and quadratic models, under the recovery of face value (RFV) assumption. We use a preference-free framework, which is independent of the market prices of risk, and yet allows...

Although foreign banks can act as catalysts for financial and economic development their role remains controversial because they might simply displace local lenders thereby tightening firms' overall access to credit. To settle this issue we study their effect on real economic activity in a large...

Although foreign banks can act as catalysts for financial and economic development their role remains controversial because they might simply displace local lenders thereby tightening firms' overall access to credit. To settle this issue we study their effect on real economic activity in a large...

It was once conventional wisdom that lenders routinely influenced corporate managers’ decision making. Covenants constrained borrower risk taking and compelled specific affirmative obligations to protect lenders. Recent policy discussion, however, laments loan markets’ turn to various forms...

We study the effects of the diversification of funding sources on the financing conditions for firms. We exploit a regulatory reform which took place in Italy in 2012, i.e., the introduction of “minibonds”, which opened a new market-based funding opportunity for unlisted firms. Using the...

Promoting credit services to small and medium-size enterprises (SMEs) has been a perennial challenge for policy makers globally due to high information costs. Recent fintech developments may be able to mitigate this problem. By leveraging big data or digital footprints on existing platforms,...