Selected publications

Carbon Taxes and the Geography of Fossil Lending

(with Luc Laeven)
Journal of International Economics, 144, September 2023.

The introduction of a carbon tax is followed by an increase in lending to coal, oil, and gas companies abroad, especially by banks with large prior fossil-lending exposures, and more so to countries with less strict environmental regulation and bank supervision.

Finance and Green Growth

(with Ralph De Haas)
Economic Journal, 133(650), pp. 637-668, February 2023.

Stock markets reduce the economy's carbon footprint via two distinct mechanisms: lowering emissions per unit of output in carbon-intensive sectors, and reallocating investment towards "green" ones.

Political Cycles in Bank Lending to the Government

(with Michael Koetter)
Review of Financial Studies, 34(6), pp. 3138-3180, June 2021.

Local savings banks in Germany increase significantly lending to the home-state government after an election-driven power change at the state level, a pattern absent for comparable cooperative banks.

The Invisible Hand of the Government: Moral Suasion During the Sovereign Debt Crisis

(with Steven Ongena and Neeltje Van Horen)
American Economic Journal: Macroeconomics, 11(4), pp. 346–379, October 2019.

During the European sovereign debt crisis, domestic banks were substantially more likely than foreign banks to increase their holdings of domestic sovereign bonds in months during which the domestic government needed to roll over relatively more sovereign debt.

House Prices, Home Equity Borrowing, and Entrepreneurship

(with Stefano Corradin)
Review of Financial Studies, 28(8), pp. 2399–2428, August 2015.

In liquid mortgage markets, higher housing wealth enables credit constrained home owners to start a business by extracting home equity from their residential property.

Exporting Sovereign Stress: Evidence from Syndicated Bank Lending During the Euro Area Sovereign Debt Crisis

(with Neeltje Van Horen)
Review of Finance, 19(5), pp. 1825–1866, August 2015. Winner of the Pagano-Zechner Prize for the Best Non-Investment Paper.

Banks with large impaired sovereign bond exposures reduce the supply of credit to foreign borrowers, suggesting that sovereign stress can increase the home bias in bank lending.

Financial Development, Sectoral Reallocation, and Volatility: International Evidence

(with Simone Manganelli)
Journal of International Economics, 96(2), pp. 323–337, July 2015.

Deeper financial markets reallocate investment away from industrial sectors with a large contribution to aggregate volatility, reducing the volatility of GDP growth for a given level of growth.

Credit Constraints, Equity Market Liberalization, and Growth Rate Asymmetry

Journal of Development Economics, 107(1), pp. 202–214, March 2014.

Opening the economy to foreign portfolio investment results in a substantially higher negative skewness of output growth, an effect that is stronger in countries which experienced a banking crisis after liberalization.

'When the Cat's Away the Mice Will Play': Does Regulation At Home Affect Bank Risk Taking Abroad?

(with Steven Ongena and Gregory F. Udell)
Journal of Financial Economics, 108(3), pp. 727–750, June 2013.

Banks operating in multiple jurisdictions respond to tighter regulation in their primary domestic markets by increasing lending to ex-ante riskier firms in foreign markets.

Cross-Border Banking, Credit Access, and the Financial Crisis

(with Gregory F. Udell)
Journal of International Economics, 87(1), pp. 147–161, May 2012.

During the global financial crisis of 2008-09, the foreign branches and subsidiaries of parent banks hit by adverse balance sheet shocks reduced lending to local small businesses.