I study how payment technology reshapes competition among banks. I exploit quasi-random variation in exposure to the introduction of Brazil's Pix, an instant payment system, and show that instant payments increase deposit competition. Small bank …
How should monetary policy respond to evolving financial conditions? To answer this question, we develop and Bayesian estimate a dynamic macro model with a detailed financial sector and long-term defaultable nominal debt contracts to quantify how …
We examine the impact of digital payments on the transmission of monetary policy by leveraging administrative data on Brazil's Pix, a digital payment system. We find that Pix adoption reduces banks' market power, making them respond more to changes …
The role of deposits in the payment system creates both a liquidity constraint and a liquidity recycling mechanism for the banking system. When financing illiquid loans with deposits, a bank must rely on its liquid assets to cover depositors’ …
We examine how banks and public bondholders respond to borrowers' non-financial performance across debt markets and over time. After negative environmental, social, or governance events, public bondholders substantially reduce financing, while banks …