New working paper on the importance of cash for firm investment after a financial crisis

In a new working paper: “All you need is cash: Corporate cash holdings and investment after the financial crisis” written jointly with Andi Joseph, Christiane Kneer and Jumana Saleheen  we show that having cash at hand allows firms to continue to invest during the crisis while industry rivals without cash have to divest. This gives cash-rich firms an important competitive edge that not only benefits them during the crisis but that gives them an advantage that lasts way beyond the crisis years. See also our blog on the topic.

The Invisible hand of the government” featured in AEA journals Research Highlight

European domestic banks were more likely to buy bonds issued by the governments when default looked imminent. What persuaded them? See

Panel discussion on the role of non-banks in the economy at ESRB Annual Conference.

At the fourth ESRB Annual Conference I discussed the link between demographic changes and non-bank activity in the mortgage market. I highlighted the role insurers can play unlocking cash when retirees are asset rich but cash poor.  See here my presentation

My paper “The Invisible Hand of the Government” accepted for American Economic Journal – Macroeconomics

My paper “The Invisible Hand of the Government: Moral Suasion during the European Sovereign Debt Crisis” written jointly with Steven Ongena and Alexander Popov has been accepted for the American Economic Journal – Macroeconomics. Using a novel two-layered identification strategy we provide evidence of moral suasion affecting government bond markets during the European sovereign debt crisis. During the height of the sovereign debt crisis, domestic banks were more likely than foreign banks to purchase domestic sovereign bonds during months in which the government needed to roll over a relatively large amount of maturing debt. Domestic banks that received government support, are small or with weaker balance sheets were particularly susceptible to moral suasion. Governance of banks played less of a role.

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Panel discussion on policy evaluation at the 2018 CEBRA Annual Meeting

At the 2018 CEBRA Annual Meeting the Deutsche Bundesbank and Financial Stability Board organized a high‐level panel on the evaluation of the G20 regulatory reforms. Together with Dietrich Domanski (FSB) and Joao Santos (NY Fed), I discussed the challenges and opportunities of policy evaluation. See here my presentation [link to ppt].