We estimate the effect of carbon pricing policy on bank credit to greenhouse gas emitting firms by studying cap-and-trade legislation. Our analyses exploit a discontinuity in the embedded free-permit threshold of the federal Waxman-Markey cap-and-trade bill and the geographic restrictions...

We show that when only a few investors contribute a substantial portion of a fund's equity, the probability of large liquidity-driven fund outflows increases because investors' idiosyncratic liquidity shocks are not diversified away. Using confidential regulatory filings, we find the five...

We present a framework to identify market responses to the uncertainty regarding both potential hurricane landfall and subsequent economic impact. Stock options of firms with establishments in the landfall region exhibit large, long-lasting increases in implied volatility, reflecting impact...

The collapse of Lehman Brothers illustrated the importance of managing prime broker counterparty risks for hedge funds. Liquidity shocks to prime brokers can lead to cycles of deleveraging that produce losses at funds and potentially have harmful effects on financial market function and credit...

We show that when only a few investors contribute a substantial portion of a fund's equity, the probability of large liquidity-driven fund outflows increases because investors' idiosyncratic liquidity shocks are not diversified away. Using confidential regulatory filings, we find the five...

The collapse of Lehman Brothers illustrated the importance of managing prime broker counterparty risks for hedge funds. Liquidity shocks to prime brokers can lead to cycles of deleveraging that produce losses at funds and potentially have harmful effects on financial market function and credit...

Hedge fund gross U.S. Treasury (UST) exposures doubled from 2018 to February 2020 to $2.4 trillion, primarily driven by relative value arbitrage trading and supported by corresponding increases in repo borrowing. In March 2020, amid unprecedented UST market turmoil, the average UST trading hedge...