Research
Working Papers
Abstract. How does endogenous corporate debt maturity shape monetary transmission? We show that it depends on the composition of long-term interest rates. Using euro-area credit-registry data, we find that firms with greater refinancing needs extend new-debt maturity relatively more when expected future short rates rise as a form of insurance against idyosincratic refinacing risk; but they do it by less when term premia increase. Our empirical design exploits predetermined repayment schedules, within-bank-month comparisons, and high-frequency yields movements. An heterogeneous-firms model with financial frictions, calibrated to the loan-level data, matches these untargeted differential maturity responses and shows that maturity flexibility cushions investment contractions and reduces default following news of higher future rates. This stabilizing effect is even stronger when expected-rate news coincides with higher term premia. Applying the model to the 2022–24 euro-area tightening cycle shows that, when firms enter with longer-maturity debt, earlier maturity adjustment protects investment and reduces defaults without additional deleveraging. These findings establish a maturity-insurance channel of monetary transmission whose effects depend on both the long-duration financing and firms' inherited liability structures.
Awards: FED Board Dissertation Fellowship, Boston College Graduate School's Dissertation Fellowship 2026/27
Presented at Boston College, FED Board, WEAI CSWEP, BC Research Day, 6th WE_ARE_IN Macroeconomics and Finance Conference (Poster), 2026 Fall Midwest Macro
Abstract. Uncertainty about U.S. policy crosses borders through global banks. Matching supervisory data on euro area banks’ U.S. exposures with the credit register, we exploit predetermined bank-level US exposure around the U.S. presidential elections and the time series variation of U.S. Economic and Policy uncertainty (EPU). Within the same firm and quarter, banks at the 75th versus 25th percentile of US asset exposure cut new lending at home by 9 percent after the 2024 presidential election, charge higher rates, shorten maturities, and reallocate their portfolio toward government EA securities. Effects are larger for banks with weak balance sheet characteristics and predict lower investment and employment at firms with indirect U.S. exposure via their banks. We don't find similar findings in events in which US EPU uncertainty does not rise.
Presented at ECB, Boston College, CESifo Munich JIE Summer School (2025), FED Board
Media and Featured: ECB Blog Post, ECB and ESRB report on financial stability risks from geoeconomic fragmentation, Lane's speech The transmission of monetary policy: financial conditions and credit dynamics
Abstract. The conventional measure of corporate currency mismatch (FX) is incomplete when non-financial firms borrow against their earnings following an exchange rate depreciation. In a two-sector small open economy model with dominant-currency pricing, an exchange rate depreciation tightens the non-tradable producer’s borrowing constraint even at a zero dollar-debt share. We derive a closed-form earnings-adjusted FX measure that is the net dollar operating exposure relative to pledgeable earnings. Because exchange rates and pledgeable earnings respond jointly to shocks, depreciations of the same size can have opposite effects on borrowing capacity depending on their source—an increase in the foreign monetary policy rate tightens borrowing constraints, whereas a fall in export demand can relax them—which may help explain why empirical studies find mixed evidence on whether exchange rate depreciations are contractionary.
Presented at the IMF, Boston College, Oxford JIE Summer School (2024)
Work in Progress
Bank Capital Regulation, Production Networks, and the Supply of Corporate Credit
Abstract. This paper studies how tighter bank capital regulation reshapes the allocation of credit across banks, firms, and non-bank financial intermediaries. We exploit the staggered introduction of positive countercyclical capital buffers (CCyB) across euro-area countries in 2022 as a quasi-natural experiment. Banks more exposed to higher capital requirements significantly contract credit supply, particularly to smaller and riskier firms. While bank lending declines, affected firms substitute for alternative sources of finance. These include trade credit and non-bank lending. Using granular credit register data matched with firm balance sheets and production-network information, we document that large firms partially absorb the contraction in bank credit by extending more trade credit to financially constrained customers. Corporate-affiliated non-bank financial institutions also expand lending to riskier borrowers, contributing to the financialization of large firms. As a result, macroprudential tightening alters not only the volume but also the composition of credit. Intermediation is reallocated from regulated banks toward firms and non-bank lenders within production networks. These findings highlight a key transmission channel of capital regulation operating through interfirm relationships and non-bank intermediation.
Presented at Boston College