We build a three-period model to investigate market failures in the market-based financial system. Institutional investors (IIs), such as insurance companies and pension funds, have liabilities offering guaranteed returns and operate under a risk-sensitive solvency constraint. They seek to...

The objective of this paper is to investigate which factors - macroeconomic, policy - related or institutional - foster the implementation of structural reforms. To this objective, we look at episodes of structural reforms over three decades across 40 OECD and EU countries and link them to such...

This paper presents a positive theory of centralization of political decisions in an international union. My central claim is that lobbies play a role in determining the assignment of competencies to the union because their power of influence can increase or decrease under centralization. I show...

We exploit election-driven turnover in State and local governments in Germany to study how banks adjust their securities portfolios in response to the loss of political connections. We find that local savings banks, which are owned by their host county and supervised by local politicians,...

The objective of this paper is to investigate which factors ‐ macroeconomic, policy‐related or institutional ‐ foster the implementation of structural reforms. To this objective, we look at episodes of structural reforms over three decades across 40 OECD and EU countries and link them to...

We exploit election-driven turnover in State and local governments in Germany to study how banks adjust their securities portfolios in response to the loss of political connections. We find that local savings banks, which are owned by their host county and supervised by local politicians,...

Lobbying can provide policy makers with important sector-specific information and thereby facilitating informed decisions. If going far beyond this, in particular if successfully influencing policy makers to unnecessarily tighten regulation or not opening already excessively regulated markets,...

Lobbying can provide policy makers with important sector-specific information and thereby facilitating informed decisions. If going far beyond this, in particular if successfully influencing policy makers to unnecessarily tighten regulation or not opening already excessively regulated markets,...

This paper studies the long-run evolution of bank risk and its links to the macroeconomy. Using data for 17 advanced economies, we show that the riskiness of bank assets declined materially between 1870 and 2016. But even though bank assets have become safer, the losses on these assets are...

This paper presents evidence that personal relationships between corporate borrowers and bank loan officers improve the outcomes of loan renegotiation. Analysing a bank reorganization in Greece in the mid-2010s, I find that firms that experience an exogenous interruption in their loan officer...