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 …
Should monetary policy respond to corporate credit spreads? We develop and estimate a Bayesian dynamic general equilibrium model with long-term defaultable nominal corporate debt and constrained financial intermediaries. Corporate credit spreads are …
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 study how digital payments affect consumer credit through the information they generate. Using Brazilian credit registry and transaction-level data on Pix, credit and debit cards, we show that Pix users are more likely to receive credit cards, …