This paper examines greenwashing practices in environmental funds. We utilize a unique data set of US equity mutual fund holdings between 2012 and 2021 to calculate the funds’ carbon footprints. Using a difference-in-differences analysis, we find that, following their commitments to...

This paper examines greenwashing practice in sustainable funds. We utilize a unique data set of US equity mutual fund holdings between 2011 and 2021 to calculate the sustainable funds' carbon footprint. Using an event study, we find that sustainable fund flows initially respond positively to...

We explore how bank CEOs' cultural heritage shapes the nexus between lending relationships and the cost of bank loans in the US syndicated loans market. We show that banks led by CEOs that trace their origin in more individualistic and masculine societies are less inclined to share with their...

We develop a model to analyze distress spillover from the OTC interest rate swaps (IRS) market into the interbank market due to central clearing and margin requirements. We show that margin procyclicality in the OTC IRS market derived by interest rate volatility can lead to the onset of systemic...

We empirically evaluate the channels through which securitization impacts bank profitability. To this end, we analyze the role played by bank risk, cost of funding, liquidity and regulatory capital in explaining the relationship between securitization and bank profitability. We find that...

We provide new evidence about the effect of securitization on bank stability and systemic risk in the run-up to and following the global financial crisis by considering the role of the bank lending channel of monetary policy. In so doing, we use a structural model of bank stability to construct...

We develop a model in which margin procyclicality and the propensity for liquidity hoarding interact to generate a systemic liquidity crisis. In this model, banks lend and borrow in the interbank market to mitigate liquidity risk and trade derivatives contracts in the OTC derivatives market to...

We develop a macroprudential stress test to assess the resilience of banking systems. The proposed approach integrates liquidity risk and solvency risk and provides a convenient method to estimate the change in both of them based on the evolution of financial distress within the banking system....