Gene Woo Kang

Welcome! I am a PhD candidate in finance at Haas School of Business, UC Berkeley. My research interests lie in Banking, Corporate Finance, and Household Finance. Specifically, I am focused on examining the impact of technological advances in the banking sector, competition between banks and shadow banks in the mortgage market, the transmission of shocks in financial markets, and firms' choices of debt types.

Prior to my time at UC Berkeley, I worked for two years as a research assistant at the Financial Stability Division of the Federal Reserve Board. I completed my bachelor's degree at MIT.

I am on the 2026-2027 job market.

Email: gene_kang@haas.berkeley.edu

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Research

Job Market Paper

"Which Branches Survive? Digital Banking, Capital Regulation, and Local Lending". (Winner of the American Bankers Association Banking Research Dissertation Grant)

Abstract: U.S. bank branches have declined by a quarter since 2009, coinciding with the rise of digital banking and post-crisis capital regulation. I study how each force affects branches differently depending on their exposures to deposits, mortgages, and small business lending. Exploiting staggered app rollouts across banks and comparing branches within them, I show digital adoption re-sorts the branch network: banks close branches with no product franchise and keep those that do what a screen cannot. Deposit franchises are shielded most; protection follows customer relationships and the soft information that small business lending runs on. I then estimate a structural model in which the app replaces routine services and moves each product's value at its own estimated rate, while capital rules tax each product's revenue by its risk weight. The model attributes 24 percent of voluntary closures since 2011 to the two forces, 93 percent digital and 5 percent the Basel III tightening. The two close mostly different branches, but one in six closures attributed to regulation occurs only because digital weakened the branch's value first. The model implies the two forces eliminate roughly $125 million of small business credit a year, none of it replaced by rival banks; in the same period, about forty counties lost their last bank branch entirely, becoming banking deserts.

Working Papers

"Local Housing Market Experiences and Homeownership Decisions," (with Junru Lyu and Sharath Sonti), Submitted. - Full Text

Abstract: Buying a home is the most consequential financial decision many households face, yet little is known about how personal housing market experiences shape this choice. Using individual level data from the University of California Consumer Credit Panel (UC-CCP), we construct precise histories of local housing returns and volatility at the zip code level. Guided by a dynamic life-cycle model in which past experiences shape beliefs about future house prices, we find that a 1 percentage point (p.p.) increase in experienced returns raises the probability of transitioning into homeownership by 7% relative to the quarterly average of homeownership transition rate, and a 1 p.p. increase in experienced volatility decreases this probability by 10%. Consistent with life-cycle models, the effects are primarily driven by younger individuals' first-time entry into homeownership. We further show that higher experienced returns predict higher leverage at mortgage origination, highlighting a novel risk-taking channel.

Policy Notes

"Household and Business Debt: A Fire-Sale Risk Analysis," (with Cai, F., Kara, G., Swem, N., and Zikes, F.), FEDS Notes, 2021. - Full Text / Podcast (NotebookLM)

Abstract: As of year-end 2019, nonfinancial business debt (BD) and household debt (HD) were at similar levels, yet Federal Reserve Financial Stability Report suggested that BD posed greater risks to financial stability than HD. We look through the lens of fire-sale risks to show why nonfinancial BD is more concerning for financial stability. We examine BD and HD according to their holder types, credit quality, and market liquidity features, and we highlight the areas of greatest concern for fire sales.

"Bank Borrowings by Asset Managers: Evidence from US Open-End Mutual Funds and Exchange-Traded Funds" (as lead RA; with Cai, F., and Shin, C.), FEDS Notes, 2021. - Full Text

Abstract: In this note, we look into investment funds' access to and usage of bank credit, based on a new dataset on credit line (and other types of loan) extension by top bank holding companies to open-end mutual funds and ETFs in the United States. We find that the aggregate amount of bank lending to open-end funds and ETFs was small and greatly fluctuated across time. Bank credit, particularly in the form of credit lines, has offered funds a flexible liquidity source from which they can draw down cash in times of excessive fund outflows, such as during the onset of the COVID-19 pandemic outbreak. In particular, funds that hold relatively more illiquid assets, such as bank loan funds, are more reliant on bank credit lines.

Work in Progress

"Nonbank Lending in Mortgage Market and Monetary Policy Transmission," (with Kara, G. and Siemmer, M). -Slides available upon request

Abstract: This paper studies how monetary policy transmits to mortgage lending through banks versus nonbank lenders, exploiting the sharp differences in their funding structures. Using confidential HMDA loan-level data combined with high-frequency monetary policy shocks and local projection methods, we document that nonbank mortgage lenders contract lending more aggressively than banks following a monetary tightening with quantity effects that are persistent over several quarters. We show that these differential responses are closely tied to funding costs: banks benefit from relatively stable deposit funding, while nonbanks rely on warehouse credit lines and loan sales whose costs are more sensitive to policy rates. Consistent with this mechanism, stand-alone nonbanks respond more strongly than bank-affiliated nonbanks. Overall, our results highlight the central role of lender funding structures in shaping the transmission of monetary policy to mortgage credit supply.

"The Role of Information Disclosure Cost in Firms' Choice on Debt Type"

"Digital Banking in the United States: New Facts from App-level Data," (with Matteo Benetton)

"Bank and Non-bank Specialization in the Mortgage Market," (with Matteo Benetton)

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