2026 Best Young Researcher in Finance and Insurance, Institut Louis Bachelier/SCOR Foundation for Science
2023 Young Researcher in Economics, Autorité des Marchés Financiers
Head of the Financial Economics team at Centre d'Économie de la Sorbonne
Affiliated researcher, Dauphine Foundation Digital Finance Chair
Contact
sylvain.carre(at)univ-paris1.fr
CV_Carre.pdfImperfect Supervision, Regulatory Penalties, and Banks' Disclosing Culture, with Oscar Lange.
Presentations: Deutsche Bundesbank/Leibniz Institute (upcoming) - Goethe Universität - LAPE-FINEST Spring Workshop - GDRE Money-Banking-Finance@Rennes - Dauphine
If banks and the regulator have diverging objectives, why do we routinely observe communication between them? We propose a solution based on imperfect supervision. We consider a leading example of regulation---capital requirements, whose optimal level depends on the cost of equity. Banks commit to either reveal this cost or to not communicate, which we interpret respectively as having installed a culture of cooperation with the regulator, or not. In the benchmark case of perfect supervision, we verify that the divergence between private and public objectives never leads to communication. By contrast, under imperfect supervision, we evidence a rich interaction between non-compliance penalties, capital requirements, and banks' incentives to disclose. We prove that there typically exists a range of penalties that induce bank disclosure and that the regulator may indeed find it optimal to select one of them. Viewed through this lens, penalties are not only "threats", but also a cooperation-inducing mechanism.
Liquid Staking: When Does It Help?, with Franck Gabriel. (New version available)
Presentations: Bachelier World Congress @Bologna - CY Cergy/ESSEC Seminar - Tech For Finance: AI and Blockchain (@Paris-Dauphine) 2025
Liquid staking, which allows to redeploy capital from a blockchain’s staking pool into decentralized finance (DeFi), is a recent instance of a financial innovation promoted for its “capital efficiency”. But is it always desirable? We build a tractable general equilibrium setup to answer this question, where for concreteness the DeFi outlet is a lending pool. In the benchmark case without friction, liquid staking does improve upon traditional staking. But we prove that liquid staking can backfire when a friction is at play. (i) When investors are large, liquid staking exacerbates concentration issues, so that replacing traditional by liquid staking may be inefficient. (ii) When the security of the blockchain is endogenous, liquid staking can worsen security.
Efficiency and Security in DeFi Lending, with Franck Gabriel. (New version available)
Presentations: NEOMA Business School - ISFA Lyon - SKEMA Business School - Apéro DeFi @ Palais Brongniart, Paris - 2nd International Cardiff Fintech Conference - Dauphine Digital Days - Université Paris I Panthéon-Sorbonne - Banque de France - Tech For Finance: AI and Blockchain (@Paris-Dauphine) 2024
We investigate the design of efficient DeFi lending interest rate mechanisms (IRMs) in a tractable general equilibrium model. One notable feature of our framework, which contrasts with other narratives, is that a friction makes the optimal utilization rate state-dependent. Specifically, the friction we consider is that the security of the underlying (Proof-of-Stake) blockchain is endogenous to the market value of the staking pool. Our analysis provides a new interpretation of what an IRM does. Our main results are to rationalize the widespread use of IRMs depending on the utilization rate only by proving that those are optimal under a condition that we explicit; and to construct more general mechanisms restoring efficiency when this condition is not met.
Banks as Liquidity Multipliers, with Damien Klossner - Review of Financial Studies (2024), volume 37(1), pages 265-307.
Insider Trading with Penalties, with Pierre Collin-Dufresne and Franck Gabriel - Journal of Economic Theory (2022), volume 203, pages 1-36.
Disclosures, Rollover Risk, and Debt Runs - Journal of Banking and Finance (2022), volume 142, pages 1-18.
The Sources of Sovereign Risk, with Daniel Cohen and Sébastien Villemot - Journal of International Economics (2019), volume 118, pages 31-43.
(Computer science/Game theory) Smart Proofs via Recursive Information Gathering, with Gabriel, Hongler, Lacerda and Capano - ACM Distributed Ledger Technologies (2024), volume 3(1), pages 1-19.
