Credibility, trust, and perception of authorities’ performance
The credibility of an institution is, almost, synonymous with how well it is trusted. This column uses survey data to examine how trust in various...
Research highlight
The Gender Gap in Household Bargaining Power: A Revealed-Preference Approach
The Review of Financial Studies, hhae039
Latent fragility: Conditioning banks' joint probability of default on the financial cycle
Journal of International Money and Finance, 146, 103107
How the financial authorities can respond to AI threats to financial stability
Artificial intelligence can act to either stabilise the financial system or to increase the frequency and severity of financial crises. This second...
AI financial crises
The rapid adoption of artificial intelligence is transforming the financial industry. This first of a two-column series argues that AI may either...
Investor Memory and Biased Beliefs: Evidence from the Field
We survey a large representative sample of retail investors in China to elicit their memories of stock market investment and return expectations. We...
Research highlight
High-frequency trading in the stock market and the costs of options market making
Journal of Financial Economics, 159, 103900
The Law of Small Numbers in Financial Markets: Theory and Evidence
We build a model of the law of small numbers (LSN)—the incorrect belief that even small samples represent the properties of the underlying population...
What Drives Repo Haircuts? Evidence from the UK Market
Using a unique transaction-level data, we document that only 60% of bilateral repos held by UK banks are backed by high quality collateral. Banks...
Subtle Discrimination
We introduce the concept of subtle discrimination - biased acts that cannot be objectively ascertained as discriminatory - and study its implications...
The Inference-Forecast Gap in Belief Updating
Evidence from experiments, surveys, and the field has uncovered both underreaction and overreaction to new information. We provide new experimental...
Why so many crises happen when we know why they happen and how to prevent them
Financial crises are not complicated, and many claim to know why they happen and how to prevent them. Why then do they happen with such alarming...
Reducing bureaucratic hassle in Ukraine
A reform removing the need for businesses to use a company seal when dealing with government agencies means ‘signed, sealed and delivered’ has become...
Unintended Consequences of Holding Dollar Assets
We examine a novel mechanism whereby the US dollar’s global dominance can have a large, unexpected impact on foreign Treasury yields in crisis periods...
