Financial regulators must consider the benefits and limitations of pilot studies when pursuing evidence-based decision-making. Although pilot studies may generate new knowledge, they are expensive and often flawed by serious selection and spillover problems. Instead, regulators can often...

Some mutual funds purchase stocks before dividend payments to artificially increase their dividends, which we call "juicing." Funds paid more than twice the dividends implied by their holdings in 7.4% of fund-years examined. Juicing is associated with larger inflows, and is more common among...

This paper surveys some economic principles required to understand the characteristics and effects of flash orders and trading. We present the benefits and current controversies surrounding flash orders. Finally, we offer recommendations that would be of interest to policymakers

We identify growth in riskless principal trades (“RPTs”) using TRACE corporate bond market trade data. An RPT is a brokered trade arranged by a dealer for which the dealer obtains compensation by marking up the price instead of charging a commission. Over the last 15 years, RPTs increased...

Financial regulators, when pursuing the goals of evidence-based decision making, should recognize both the benefits and limitations of the use of regulatory pilot studies. While pilot studies have potential to generate new knowledge about financial markets, regulators often can effectively...

The U.S. equity market changed dramatically in recent years. Increasing automation and the entry of new trading platforms has resulted in intense competition among trading platforms. Despite these changes, traders still face the same challenges as before. They seek to minimize the total cost of...

Using a factor-analytic model that extracts common valuation information from the prices of stocks that were not banned, we estimate that the ban on short-selling financial stocks imposed by the SEC in September 2008 led to substantial price inflation in the banned stocks. The inflation reversed...