Publications
Pirates without Borders: the Propagation of Cyberattacks through Firms’ Supply Chains
Journal of Financial Economics, 147(2), February 2023, 432-448. Editor’s choice.
Co-author: Marco Macchiavelli and André Silva
Paper · BibTeX · Google Scholar
The Anatomy of the Transmission of Macroprudential Policies
Journal of Finance, 77(5), October 2022, 2533-2575. Lead article.
Co-author: Viral Acharya, Katharina Bergant, Tim Eisert, Fergal McCann
Paper · BibTeX · Google Scholar · Online Appendix
Bank Capital, Government Bond Holdings, and Sovereign Debt Capacity
Journal of Financial Economics, 141(2), August 2021, 693-704.
Klaus Liebscher Award.
Paper · BibTeX · Google Scholar
The Design and Transmission of Central Bank Liquidity Provisions
Journal of Financial Economics, 141(1), July 2021, 27-47.
Co-author: Luisa Carpinelli
ECB Young Economist Award.
Paper · BibTeX · Google Scholar
The (Unintended?) Consequences of the Largest Liquidity Injection Ever
Journal of Monetary Economics, 112, June 2020, 97-112.
SUERF/UniCredit Foundation Research Prize.
Co-authors: Miguel Faria-e-Castro and Luìs Fonseca
Paper · BibTeX · Google Scholar
Working Papers
Zombie Credit and (Dis-)Inflation: Evidence from Europe
Resubmitted to the Journal of Finance (2nd round)
Co-authors: V. Acharya, T. Eisert, C. Eufinger, January 2023
Paper · BibTeX · VoxEU · WSJ · FT · Liberty Street
FRBNY/NYU FI 2019, MonPolicy & Reality, FIRS 2020, Cavalcade 2020, WFA 2020, AFA 2021
Abstract: We show that “zombie credit”—subsidized credit to non-viable firms—has a disinflationary effect. By keeping these firms afloat, zombie credit creates excess aggregate supply, thereby putting downward pressure on prices. Granular European data on inflation, firms, and banks confirm this mechanism. Markets affected by a rise in zombie credit experience lower firm entry and exit, capacity utilization, markups, and inflation, as well as a misallocation of capital and labor, which results in lower productivity, investment, and value added. If weakly-capitalized banks were recapitalized in 2009, inflation in Europe would have been up to 0.21pp higher post-2012.
Exorbitant Privilege? Quantitative Easing and the Bond Market Subsidy of Prospective Fallen Angels
Co-authors: Viral Acharya, Ryan Banerjee, Tim Eisert, Renée Spigt, November 2022
AFA 2022 · EFA 2022 · NBER SI EFEL 2021 · Oxford Macro-Finance 2021 · NBER SI CF/RISK 2022
Paper · BibTeX · Liberty Street · FT · Bloomberg
Abstract: We document capital misallocation in the U.S. investment-grade (IG) corporate bond market, driven by quantitative easing (QE). Prospective fallen angels—risky firms just above the IG rating cutoff—enjoyed subsidized bond financing between 2009 and 2019, especially when the scale of QE purchases peaked and from long-duration IG-focused investors that held more securities purchased in QE programs. The benefiting firms financed risky acquisitions with bond issuances, exploiting the sluggish adjustment of credit ratings in downgrading issuers after M&A. This activity increased the firms’ market share, adversely affecting competitors’ employment and investment. Eventually, these firms suffered severe downgrades at the onset of the pandemic.
Other Papers
Zombie Lending: Theoretical, International, and Historical Perspectives
Annual Review of Financial Economics, 14, 2022.
Co-authors: Viral Acharya, Tim Eisert, Sascha Steffen
Paper · Working Paper · BibTeX