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Central Bank Digital Currency: Will Banks Survive?

Will an introduction of CBDC cause disintermediation? I provide empirical and theoretical evidence that CBDC will not necessarily crowd out bank deposits in economies with significant demand for currency. I estimate the model for the US using data on …

The Impact of the Deposit Channel on the International Transmission of Monetary Shocks

We provide causal evidence that local market power in deposit markets drives international transmission of US monetary policy through global banks. After a contractionary monetary shock, global banks with local deposit market power increase bank …

Are US Monetary Surprises Surprising? Evidence from Global Markets

We show that FOMC announcement surprises are predicted by preceding ECB monetary policy announcement surprises. Specifically, a 1 p.p. ECB monetary policy surprise predicts a subsequent 0.25 p.p. FOMC surprise. We find little evidence that this …

Where Do Brown Companies Borrow From?

We study sources of debt for companies with poor ESG performance. Using a structural model of credit risk, we show that for low-ESG-rated firms, it is less expensive to borrow from banks than from public market compared to high-ESG-rated firms. As a …