Maintaining Confidence - Understanding and preventing a major financial institution failure mode
This paper proposes the solvency/liquidity spiral as an failure mode affecting large financial institutions in the recent crisis. The essential...
Bank Capital Standards: A critical review
The aim of this paper is to review the significant flaws in the Basel Accords, which undermine their contribution to stability in banking and...
A Coasean Approach to Bank Resolution Policy in the Eurozone
The Eurozone needs a bank resolution regime that can work across seventeen independent nations of diverse sizes with varying levels of financial...
A flow-based explanation for return predictability
Review of Financial Studies, 25 (12). pp. 3457-3489.
Shareholder Empowerment and Bank Bailouts
We investigate the hypothesis that shareholder empowerment may have led to more bank bailouts during the recent financial crisis. To test this...
Adjustment Mechanisms in a Currency Area
Both the euro-area and the United States suffered an initially quite similar housing and financial shock in 2007/8, with several states in both...
Bankers and bank investors: Reconsidering the economies of scale in banking
We study economies of scale in banking by viewing banks as combinations of financial and human capital that create rents which accrue to investors and...
Agency, Firm Growth, and Managerial Turnover
We study managerial incentive provision under moral hazard in a firm subject to stochastic growth opportunities. In our model, managers are dismissed...
Do Standard Corporate Governance Practices Matter in Family Firms?
We study the unique governance dynamics surrounding family ownership in a voluntary regulatory arena where we can directly observe the impact of firm...
Market Liquidity - Theory and Empirical Evidence
In this paper we survey the theoretical and empirical literature on market liquidity. We organize both literatures around three basic questions: (a)...
Liquidity and Asset Returns under Asymmetric Information and Imperfect Competition
We analyze how asymmetric information and imperfect competition affect liquidity and asset prices. Our model has three periods: agents are identical...
Stock Market Tournaments
We propose a new theory of suboptimal risk-taking based on contractual externalities. We examine an industry with a continuum of firms. Each firm’s...
Asset Pricing with Heterogeneous Investors and Portfolio Constraints
We study dynamic general equilibrium in one-tree and two-trees Lucas economies with one consumption good and two CRRA investors with heterogeneous...
Investing for your own and the greater good
Most of us have been brought up to believe that free markets combined with healthy competition deliver good outcomes. We also presume that what holds...
