In recent years, green bonds have gained popularity as the investment industry is looking for environmentally friendly instruments. Yet, green bonds fragment bond issues, which reduces liquidity and thereby increases financing costs. Moreover, most green bonds are used to refinance existing...

I model direct competition between investor-paid and issuer-paid credit rating agencies (CRAs). Frictions in the form of issuer private benefits induce issuer-paid CRAs to inflate ratings. Investor-paid CRAs optimally generate more accurate ratings, leading to adverse selection for investors...

We study intraday, market-wide shocks to stock prices, market liquidity, and trading activity on international stock markets and assess the relevance of recent theories on "liquidity dry-ups" in explaining such shocks. Market-wide price shocks are prevalent and large, with rapid spillovers...