Beyond banks: Trust among the financially underserved (with Paola Boel and Daniela Puzzello)
American Economic Association Papers and Proceedings May 2026, forthcoming.
In 2023, over 18 percent of US households were financially underserved. Prior work identifies mistrust in banks as an important factor, but it is unclear whether this mistrust is unique to banks. To address this, we surveyed underserved individuals in the US. We elicited their levels of trust in various institutions, including banks, government entities, and alternative payment providers. We identify three dominant components of the trust scores: broad-scope trust, concerns about traditional financial institutions, and preference for a physical business presence. We explore how sociodemographic characteristics, including income, age, education, race and political affiliation, affect these components of trust.
Uncovering retail trading in Bitcoin: the impact of COVID-19 stimulus checks (with Anantha Divakaruni)
Management Science 2024, vol. 70, no. 4, pages 2066-2085.
Interview in Bloomberg. Video coverage on Coin Bureau. Media coverage: The Atlantic, Motley Fool, CoinDesk.
In April 2020, the US government sent stimulus cheques directly to households, as part of its measures to address the COVID-19 pandemic. The modal cheque was for $1,200. We find a significant increase in Bitcoin buy trades for size $1,200 during the period immediately following cheque disbursement.
The Lightning Network: turning Bitcoin into money (with Anantha Divakaruni)
Finance Research Letters 2023, vol. 52, no. 103480.
Video coverage by Anthony Pompliano. Media coverage: Bitcoin Magazine, CoinGeek, CryptoRank, The Tokenist, CriptoNoticias.
We find a robust and significant association between adoption of the Lightning Network and reduced blockchain congestion. This improvement cannot be explained by other factors, such as changes in speculative demand for Bitcoin.
Earlier version published as Federal Reserve Bank of Cleveland working paper no 22-19.
Centralized netting in financial networks (with Rodney Garratt)
Journal of Banking & Finance 2020, vol. 112, no. 105270.
Used as evidence in ruling by Securities and Exchange Commission on Euroclear Bank.
We consider how the introduction of centralized netting in financial networks affects total netted exposures between counterparties. Our results can explain why, in the absence of regulation, traders in a derivatives network do not develop central clearing.
Earlier version published as Federal Reserve Bank of New York staff report no. 717.
A mechanism for LIBOR (with Brian Coulter and Joel Shapiro)
Review of Finance 2018, vol. 22, no. 2.
Coverage in The Times and Al Jazeera.
We introduce a new method for constructing LIBOR that is based solely on transactions and produces an unbiased estimator of the true rate. We explore how this approach applies to other financial benchmarks and how it works even in markets in which there are few transactions.
Harvard Law School Forum on Corporate Governance and Financial Regulation article.
Identification of over and under provision of liquidity in real-time payment systems (with Edward Denbee and Rodney Garratt)
Journal of Financial Market Infrastructures 2015, vol. 4, no. 2.
Liquidity provision in real-time payment systems has social benefits, as it greases the wheels of the system. We devise methods for measuring liquidity contributions and assessing whether systemic inequality is greater than would be expected from random payment flows.
Earlier versions published as Bank of England working paper no. 513 and in Hellqvist and Laine (2012), 'Diagnostics for the financial markets – computational studies of payment system'.
The role of counterparty risk in CHAPS following the collapse of Lehman Brothers (with Evangelos Benos and Rodney Garratt)
International Journal of Central Banking 2014, vol. 10, no. 4.
Used by ECB for analysis of TARGET 2 liquidity in reports in 2015, 2017, 2020, 2021.
We show that, in the two months following the Lehman Brothers failure, banks in the main UK payments system made payments at a slower pace than before the failure. We find that this slowdown is related to concerns about counterparty default risk, thereby identifying a new channel through which counterparty risk manifests itself in financial markets.
2012 Vox article. Earlier version published as Bank of England working paper no. 451.