Research

Publications

1.  Begley, Taylor A., and Kandarp Srinivasan. "Small bank lending in the era of fintech and shadow banks: a sideshow?." The Review of Financial Studies 35.11 (2022): 4948-4984. 

2. Gopalan, Radhakrishnan, Xiumin Martin, and Kandarp Srinivasan. "Regulatory Protection and Opportunistic Bankruptcy" Contemporary Accounting Research 40.1 (2023): 544-576. 

3.  Haslag, Peter H., Kandarp Srinivasan, and Anjan V. Thakor. "Competition, Innovation and Crises: Evidence from 18 Million Securitized Loans." Journal of Financial Economics 162 (2024): 103947.

4. Srinivasan, Kandarp. "The securitization flash flood." Forthcoming, Review of Corporate Finance Studies

Working Papers

1. Risk in the Shadows: Leverage and Liquidity in Nonbanks with Taylor Begley

Abstract: We explain how nonbank mortgage companies (NMCs) reconcile high business risk with high leverage by linking borrowing capacity to pledgeable collateral, enforcing automatic deleveraging in downturns. Using 2011–2021 data, we show originator debt falls by 8.4% for every 10% revenue decline—an elasticity over ten times that of banks and present even for debt backed by non-Agency collateral. The same collateral-based logic allows servicers to dynamically fund 72% of liquidity needs by pledging advance receivables. These results show that supervisory frameworks using static capital ratios may overstate NMC fragility by ignoring the stabilizing effect of their collateralized funding model. 

2. The Spillover Effects of Insurer Climate Supervision into Shadow Markets with Weiling Liu and Saptarshi Mukherjee

Abstract: For the same increase in firm climate risk, insurers decrease holdings by 2% if the firm is held via bonds, yet increase by 4.6% if held indirectly via CLOs. Using the staggered rollout of climate disclosures, we show increased supervision of insurer portfolios injects capital into shadow markets. CLO managers receiving this capital launch new funds, and also include brown firms in their portfolio. Firms receiving the capital flow via CLOs increase leveraged loan issuance, and engage in greater polluting activities. By pushing insurers towards shadow markets, climate supervision can lead to the very outcome it intended to mitigate. 

3. When Banks Herd: Commonality in Sovereign Debt Holdings and its Effect on Bond Yields with Dmitry Khametshin

Abstract: We analyze whether Eurozone banks place value on having similar sovereign debt exposures. We measure commonality in exposures through the centrality of sovereigns in bank portfolios and find that it significantly predicts both the extensive and intensive margins of sovereign debt holdings. We estimate a structural model of bank portfolio demand, incorporating sovereign commonality as a bond characteristic valued by investors. Our findings suggest a strong preference for commonality, indicating herding behavior among banks. In a counterfactual analysis, we show that in the absence of this preference for commonality, equilibrium sovereign bond yields would be, on average, 1 percentage point higher. 

We are also looking for some advice in solving the eigenvector problem below. Any leads will be highly appreciated!

Works-In-Progress

 "Non-bank credit providers" (with Taylor Begley)

"Insurance Regulation and Political Risk" (with Weiling Liu and Saptarshi Mukherjee)