RESEARCH 

Inequality and Financial Fragility    Journal of Monetary Economics, Vol. 115 (2020)

The distribution of wealth influences the government’s response to systemic banking crises and shapes financial fragility.

Allocating Losses: Bail-ins, Bailouts and Bank Regulation    Journal of Economic Theory, Vol. 210 (2023) 

with Todd Keister

We study the interaction between a government's bailout policy and banks' willingness to impose losses on (or "bail-in") their investors. 

A Theory of Debt Maturity and Innovation    Journal of Economic Theory, Vol. 2018 (2024) 

I propose a theory of debt maturity as an incentive device to motivate innovation when contracts are incomplete and shaped by ex-post renegotiation. 

Private Sunspots in Games of Coordinated Attack  Forthcoming Theoretical Economics  

I propose a new approach to endogenizing the probability of a self-fulfilling outcome in games of coordination.

Unequal and Unstable: Income Inequality and Bank Risk   R&R Journal of Money, Credit and Banking

with Ulrich Schüwer

We investigate a new channel through which income inequality shapes bank risk: risk-shifting.  

When does overlapping ownership soften competition? The role of agency frictions and repeated interaction [Slides]

with Konrad Adler

Tacit collusion among firms is not necessarily easier when firms are owned by the same investor. Going from separate to common ownership actually sometimes has a pro-competitive effect.  

Smart Banks [Slides]

with Alkis Georgiadis-Harris and Maxi Guennewig

Since Diamond and Dybvig (1983), banks have been viewed as inherently fragile. We challenge this view in a general mechanism design framework with limited commitment. 

Borrower Heterogeneity and Bank Risk

with Ulrich Schüwer

We use tools from survival analysis to study bank failure risk in a model with imperfect correlation in loan defaults where borrower credit worth depends on a systematic risk factor and idiosyncratic frailty factors. 

Limited commitment, bank bailouts, and run risk: a sunspot-based approach [Slides]

I show how to use the sunspot-based approach to investigate the interplay between limited commitment, bank bailouts, and endogenous run risk in a canonical model of financial intermediation.

Optimal Banking Arrangements: Liquidity Creation without Financial Fragility [Slides]

with Maxi Guennewig

We revisit the Diamond-Rajan model of financial intermediation and show that a bank with an optimal financing structure is not subject to runs. Fragility is not inevitable for liquidity creation. 

WORK  IN PROGRESS 

Partial Deposits (with Todd Keister)

The Bail-in Game (with Todd Keister)

Anticompetitive Effects of Loan Covenants (with Konrad Adler)