The anticipation of a future bailout of distressed firms worsens ex ante adverse selection, causing a market freeze at present and inviting government intervention ("bailout trap"). When firms of heterogenous qualities raise financing, high-quality firms are willing to bear adverse selection...

Firms must transform production processes towards sustainable technologies in response to climate change and the emergence of policies aiming to curb carbon emissions. The energy shock due to the war in Ukraine renders this transformation not only important, but also urgent. All this requires...

What is the impact of granular credit risk on banks and on the economy? We provide the first causal identification of single-name counterparty exposure risk in bank portfolios by applying a new empirical approach on an administrative matched bank-firm dataset from Norway. Exploiting the fat...

This paper studies how banks compete amid digital disruption and the resulting distributional effect across consumers. Digital disruption increases the geographic coverage of banking services, bringing new entrants to local markets. However, as digital customers shift from branches to digital...

Im Rahmen der gemeinsamen Veranstaltungsreihe der Nationalen Akademie der Wissenschaften Leopoldina und des Leibniz-Instituts für Wirtschaftsforschung Halle (IWH) zu brennenden europapolitischen Themen diskutieren Lars Feld und Reint Gropp über die Stabilität der Finanzmärkte. Steigende...

Auf der Grundlage des jüngsten Diskussionspapiers beleuchten die Professoren Gropp und Rocholl den aktuellen Zustand des Bankensektors in Europa und die Auswirkungen der Coronakrise. Sie bewerten dabei auch die Reinigungseffekte der letzten Bankenkrise. In den Regionen der USA, in denen die...