Working Papers

1. The Rise of Digital Banking: Effects on Competition and Financial Stability [Job Market Paper] (Draft coming soon)

   • I combine hand-collected data, novel identification, and a structural model of the U.S. banking system to show that digital banking platforms increase competition. Banking markets become less concentrated, a larger number of banks branchlessly provide services in local markets, and customers enjoy more favorable prices and larger aggregate quantities of services provided by the banking sector. The effects are uneven across market segments, leading to changes in banks' balance sheet composition: banks with digital platforms increase their share of uninsured deposit funding and reduce their share of loan originations to low income borrowers. I study the implications of these changes for financial stability, finding that digital banking increases the systemic risk of mid-sized banks, increases digital banks' funding instability, and leads to a build up of credit risks in market segments that are less-well served by digital technologies. I evaluate how bank competition and financial stability risks may change in the future as technology and consumer preferences continue to evolve.

   • Winner: Bernstein Center Doctoral Grant, Columbia Finance Department Best 4th Year Paper.

   • Presented at: 20th Macrofinance Society Workshop (poster), Federal Reserve Board, Columbia
     
     

2. Destabilizing Digital "Bank Walks" (May 2023)
   joint with Tano Santos and Luigi Zingales

   • We study the impact of digital banking on the value of the deposit franchise and the stability of the banking sector. Using the classification of digital banking in Koont (2023), we find that when the Fed funds rate increases deposits flow out faster and the cost of deposits increases more in banks with a digital platform. The results are similar for insured and non-insured deposits. Using the model of Drechsler et al. (2023), we find that correcting for digital betas and deposit outflows results in a deposit franchise value that is 40% lower for digital-broker banks relative to a traditional bank without digital platform. We apply this analysis to Silicon Valley Bank (SVB) and find that the reduced value of the deposit franchise explains why SVB was insolvent in early March 2023, even before the bank run occurred.

   • Mentioned by: ProMarket, The Economist, Forbes.

   • Presented at: NBER SI 2023 Risks of Financial Institutions
     
     
     

3. Steering a Ship in Illiquid Waters: Active Management of Passive Funds (February 2023)
   joint with Yiming Ma, Lubos Pastor, and Yao Zeng

   • Exchange-traded funds (ETFs) are typically viewed as passive index trackers. In contrast, we show that corporate bond ETFs actively manage their portfolios, trading off index tracking against liquidity transformation. In our model, ETFs optimally choose creation and redemption baskets that include cash and only a subset of index assets, especially if those assets are illiquid. Our evidence supports the model. We find that ETFs dynamically adjust their baskets to correct portfolio imbalances while facilitating ETF arbitrage. Basket inclusion improves bond liquidity in general, but worsens it in periods of large imbalance between creations and redemptions, such as the COVID-19 crisis.

   • Mentioned by: Becker Friedman Institute , Chicago Booth Review , Knowledge@Wharton , Financial Times, ETF Stream.

   • Presented at: 2023 FIRS, 2023 AFA, 2022 Conference on Financial Economics and Accounting, 2022 Fixed Income and Financial Institutions Conference, 2022 Four Corners Index Investing Jamboree, 2022 Minnesota Corporate Finance Conference, 2022 Toronto Junior Finance/Macro Conference, 2022 MIT Sloan Junior Finance Conference, Chicago, Columbia, Florida, HKUST, Indiana, LSU, New York Fed, Notre Dame, SAIF, TMX Market Forum, UNC, USC, UT Dallas, Wharton.
     
     
     

4. Bank Credit Provision and Leverage Constraints: Evidence from the Supplementary Leverage Ratio (October 2021)
   joint with Stefan Walz

   • We identify the implications of relaxing the Supplementary Leverage Ratio in April 2020 for bank balance sheet composition and credit provision. Our findings suggest that this risk-invariant leverage ratio was binding for banks, weakly affected bank liquidity provision in Treasury markets, and strongly affected banks' portfolio composition across asset classes, amounting to a shift of banks' loan supply schedules. The increase in lending is driven primarily by real estate and personal loans, and to a lesser extent by commercial and industrial loans. We additionally provide evidence that the relaxation allowed banks to increase their repo borrowing from cash providers. Our evidence highlights that countercyclical relaxation of uniform leverage constraints can increase bank credit provision during economic downturns, in line with a precautionary cash holdings mechanism. Given the binding nature of the SLR, the relaxation of this constraint may be more effective than other countercyclical measures in allowing banks to extend credit.

   • Presented at: Federal Reserve Bank of Boston, Columbia, AFA 2022 (poster)

   • Appears in Covid Economics 72, 2021, Centre for Economic Policy Research
     
     
     

5. Peer Effects in Deposit Markets (September 2021)   — New draft coming soon
   joint with Kim Fe Cramer

   • We provide first empirical evidence that consumer peer effects matter for banks' deposit demand. Using a novel measure that depicts for each county how exposed peers are to a specific bank in a given year, we tightly identify the causal effect of peer exposure on deposit demand through a fixed effects identification strategy. We address key empirical challenges such as time-invariant homophily. We find that a one percent increase in a bank's peer exposure leads to a 0.05 percent increase in deposit market share. This effect has become stronger over time with the rise of the internet and social media, which facilitate cross-county communication. Peer exposure is especially relevant for smaller banks and customers that have access to the internet.

Education

Columbia Business School

• • PhD in Finance, 2024 

  • MPhil in Finance, 2021

University of Toronto 

• Honors BSc with High Distinction, Economics and Mathematics Specialist , 2018

Teaching

1. Instructor, Math Boot Camp  (2021; 2022)

   • • For MSFE and MSAFA. Course material is available here.

2. Instructor, Professional Education (2022)

   • • Edgewood Management LLC, Finance Training for Interns

3. TA, Managerial Economics (2020)

   • • MBA Core, for Professors Jonas Hjort, Amit Khandelwal, Nachum Sicherman

4. TA, Capital Markets (2021)

   • • MBA Core, for Professor Suresh Sundaresan

5. TA, Shareholder Activism as Value Investing (2022)

   • • MBA Elective, for Professor Wei Jiang