August 5, 2026
Time	Location	Event
08:30 to 09:00		Contintental Breakfast
09:00 to 10:20		Session 1: Banking, Competition and Structure
10:20 to 10:40		Coffee Break
10:40 to 12:00		Session 2: Banking, Competition and Structure
12:00 to 13:30		Lunch
13:30 to 15:30		Household Finance
15:30 to 15:45		Coffee Break
15:45 to 16:45		Flash Session 1
18:00 to 22:00		Conference Dinner
August 6, 2026
Time	Location	Event
08:30 to 09:00		Breakfast
09:00 to 10:20		Corporate Finance and Governance 1
10:20 to 10:40		Coffee Break
10:40 to 12:00		Corporate Finance and Governance 2
12:00 to 13:30		Lunch
13:30 to 15:30		Intermediation, Credit and Innovation
15:30 to 15:45		Coffee Break
15:45 to 16:30		Flash Session 2

Summary of All Sessions
Click here for an index of all participants

#	Date/Time	Type	Title/Location	Papers	Organizer
1	August 5, 2026 9:00-10:20	contributed	Banking Competition and Structure 1	2
2	August 5, 2026 10:40-12:00	contributed	Banking Competition and Structure 2	2
3	August 5, 2026 15:45-16:45	invited	Flash Session 1	4
4	August 6, 2026 9:00-10:20	invited	Corporate Finance and Governance 1	2
5	August 6, 2026 10:40-12:00	invited	Corporate Finance and Governance 2	2
6	August 6, 2026 13:30-15:30	invited	Intermediation, Credit and Innovation	3
7	August 6, 2026 15:45-16:30	invited	Flash Session 2	3

 

7 sessions, 18 papers, and 0 presentations with no associated papers

Dynamic Finance and Banking
Detailed List of Sessions

Session 1: Banking Competition and Structure 1 August 5, 2026 9:00 to 10:20
Session Organizer: ,
Session type: contributed
Multimarket Banking with Demand Complementarity: A Quantitative Model Abstract We combine reduced-form evidence of cross-product demand spillovers with a dynamic banking model to study consumers’ demand complementarity and its implications for multimarket banking. Using a border difference-in-differences design that exploits county-level variation in Conforming Loan Limits, we identify how exogenous shifts in banks’ mortgage market shares spill over to deposit intake. We use this spillover to estimate a dynamic model in which banks compete across multiple markets and cross-selling arises endogenously as a response to consumer demand complementarity. Our estimates show that a mortgage relationship increases a household’s likelihood of choosing the same bank for deposit services by 18.8 percent. Such complementarities give rise to economies of scope for multimarket banks, amounting to 2.3 percent of their market value. The model further highlights a novel demand-side channel that creates cross-market interconnectedness in both pricing and quantities of bank services.
Presented by: Yufeng Wu,
A Quantitative Model of Bank Merger Dynamics Abstract We develop a simple model of the bank merger process to study the rise in bank concentration following the deregulation of bank branching in the Riegle-Neal Act of 1994. Motivated by the data where currently 4 (dominant) banks have over 40 percent of the U.S. deposit market share while the remaining over 4000 (fringe) banks cover the rest, we apply a dominant-fringe framework with a merger stage to model the rise in concentration following the change in regulation making interstate branching possible. We study the effect of the merger wave on competition, efficiency, and stability of the banking industry. We focus on the heterogeneous response of big and small banks’ lending to idiosyncratic deposit shocks (i.e. their marginal propensity to lend) and how this translates to granularity we document in the banking industry. Further, we examine how the effectiveness of monetary policy varies with rising loan market power.
Presented by: Dean Corbae, University of Wisconsin
Session 2: Banking Competition and Structure 2 August 5, 2026 10:40 to 12:00
Session Organizer: ,
Session type: contributed
The Dynamics of Intra-Bank Networks and the Geographic Allocation of Credit Abstract Regional disparities in access to credit have received growing attention in policy debates. Even within financially integrated systems, funds do not flow frictionlessly from deposit-rich areas to regions with high loan demand. The geographic allocation of credit is shaped by branch networks, internal capital allocation within banks, market power, local deposit–loan synergies, securitization, shadow banking, and fintech entry. This paper develops and estimates a dynamic oligopoly model in which banks endogenously choose their branch and lending-location networks while competing in local deposit and loan markets. Within each period, banks can reallocate funds across their networks, generating internal capital markets that link geographically distinct regions. Network choices reflect a trade-off between the gains from interregional liquidity reallocation and the benefits of local deposit–loan synergies, economies of density, and strategic interactions arising from local market power. We estimate the model using data from the US banking industry. The estimated model is used to evaluate two sets of counterfactuals and their implications for access to credit: bank mergers with varying degrees of network overlap, and exogenous increases in fintech entry.
Presented by: Victor Aguirregabiria, University of Toronto
Financing Small Business: Competition Effects and Welfare Gains from Credit Assistance Abstract Governments operate large-scale credit assistance programs to promote the entry and survival of small firms. We study their effects on welfare and competition by analyzing the Small Business Administration’s 7(a) program—the largest credit guar- antee scheme in the United States. We develop and estimate a model of firm behavior with credit constraints using confidential Census microdata from the hotel industry, the program’s largest recipient. Counterfactual analysis reveals that the program ex- pands credit supply to inefficiently credit-constrained firms. We estimate that 7(a) guarantees cost $24 million and raise total welfare in targeted hotel markets by $54 million. Of these gains, $31 million come from valuable firms that fail to operate without guarantees, and $23 million from enhanced competition that lowers prices and expands markets. To understand how targeting can improve program design, we examine alternative allocations of 7(a) awards. Directing funds to concentrated markets increases consumer welfare by promoting entry, while awards in larger, less concentrated markets primarily benefit hotels by reducing exit and borrowing costs.
Presented by: Chinmay Lohani, University of Pennsylvania
Session 3: Flash Session 1 August 5, 2026 15:45 to 16:45
Session Organizer: ,
Session type: invited
Grading Policies and College Major Choice with Ability Learning Abstract Universities worldwide have experienced substantial grade inflation. At some U.S. institutions, nearly half of all grades are now A’s, with inflation particularly pronounced in non-STEM fields. This paper studies how uneven grade inflation affects students’ course-taking, major choice, and sorting by comparative advantage. I develop a dynamic model of college course and major choices that features two key mechanisms: students’ concern for maintaining a high GPA and their learning about unobserved, major-specific ability from course grades. The model is matched to the grade distribution and educational outcomes of the administrative data from a large public university in Texas. To separately identify GPA concerns from ability learning, I exploit the temporary expansion of pass/fail grading during the COVID-19 pandemic. Counterfactual analyses show that equalizing grading standards to non-STEM levels increases STEM graduation by 2–10% and reduces dropout by 10–22%. It also narrows the gender gap in STEM graduation by about 8%. However, grade inflation weakens sorting: about 15% of students with low relative STEM ability remain in STEM.
Presented by: Hyunkyeong Lim, University of Wisconsin-Madison
Information Acquisition and the Finance-Uncertainty Trap Abstract This paper studies the interplay between firms' information acquisition and credit constraints, leveraging novel measures of firm-level information acquisition constructed from online job postings data. Exploiting exogenous variations in financial news production, we provide causal evidence that shocks raising the cost of information acquisition significantly tighten firms’ credit access. Complementing this evidence, we document that credit tightening is associated with persistent declines in information acquisition, particularly for high-leverage firms, suggesting a feedback loop between information acquisition and credit access. To examine the macroeconomic consequences of this interplay, we develop a tractable general equilibrium model featuring heterogeneous firms, endogenous signal precision, and value-based borrowing constraints. The model characterizes a "finance-uncertainty trap": high information costs elevate uncertainty and depress firm equity, hampering credit access; in turn, tighter credit reduces the scale of production and the returns to learning, further discouraging information acquisition. Calibrated to match micro-level moments, the model shows that this feedback loop substantially amplifies and prolongs business cycle fluctuations. The model’s internal mechanism is directly supported by evidence that exogenous credit tightening—identified through oil supply news shocks—leads to persistent declines in information acquisition.
Presented by: Ding Dong, Hong Kong Baptist University
Bank Runs with Choice of Maturities Abstract Banks hold long-duration securities because these assets hedge fluctuations in the cash flows generated by the deposit franchise: short rates compress deposit margins, but increase long-bond prices. This hedging motive, however, exposes banks to large mark-to-market losses when rates rise and can tighten liquidity and solvency constraints, increasing vulnerability to runs of the kind observed in March 2023. Using U.S. bank data, we document a non-monotonic relationship between banks’ shares of long credit-risk-free securities and marked-to-market equity values, indicating that banks with an intermediate ratio of equity to uninsured deposits hold a higher share of long bonds. We interpret this evidence through a continuous-time model in which banks optimally choose a portfolio between a short bond and a long bond, and are subject to state-dependent run risk modeled as a Poisson termination shock that destroys future franchise value when the bank becomes insolvent. The resulting endogenous run hazard generates state-dependent effective risk tolerance and delivers testable implications for dividend payouts that match key patterns in the data. The model also provides a quantitative framework to evaluate interest-rate-risk policies, including capital and liquidity requirements and regulatory limits on duration exposure.
Presented by: Angelo Mendes, University of Minnesota
Barriers to a European Banking Union Abstract This paper estimates barriers to cross-border banking within the euro area and their consequences for credit allocation and output. We develop a quantitative spatial equilibrium model in which heterogeneous banks decide whether to expand abroad and set lending rates, while firms choose how much to borrow to finance investment. Cross-border frictions operate along three margins: relationship formation, loan pricing, and banks’ branching decisions. Using loan-level data from the European credit registry (AnaCredit), we estimate these barriers at the country-pair level. We find that barriers to forming cross-border lending relationships are extremely large—and larger than what aggregate data would suggest—while implicit taxes on interest rates and loan quantities are comparatively small. We show that the estimated wedges are strongly associated with differences in national banking regulations, measured using a novel dataset on regulatory fragmentation. Embedding these estimates in the calibrated model, we assess the effect of partially lifting cross-border barriers on credit allocation and output.
Presented by: Damien Capelle, IMF
Session 4: Corporate Finance and Governance 1 August 6, 2026 9:00 to 10:20
Session Organizer: ,
Session type: invited
Maturity Walls Abstract Maturity walls occur when a majority of a firm's debt comes due within a short period (1-2 years), increasing rollover risk. Despite this, 47% of non-financial firms have them. This paper understands why firms adopt maturity walls and its implications for the aggregate economy. Using Mergent FISD data, I provide evidence that firms incur substantial fixed costs in bond issuance. I develop a dynamic model where firms decide each period the level and dispersion of their debt payments. The main trade-off is rollover risk from maturity walls in the presence of costly equity injections, versus the lower issuance costs incurred from infrequent rollovers. I estimate the model to match both aggregate and distributional moments of firms' debt payment schedules. Maturity walls increase credit spreads by 21% (36 bps) and default rates by 25% (30 bps). Lowering issuance costs reduces the adoption of maturity walls, but increases firms credit risk. Moreover, omitting maturity walls could underestimate the transmission of a credit market freeze up to 60%.
Presented by: Philip Coyle, Study Center Gerzensee
Shareholder Activism, Takeovers, and Managerial Discipline Abstract We quantitatively assess the role of activism in the market for corporate control by developing and estimating a model featuring both activism and M&A. We find that activism complements M&A, reducing the agency frictions associated with takeovers. However, activism simultaneously crowds out some M&A activity by substituting for disciplinary takeovers. Both the threat of activism and actual activist intervention create shareholder value by improving CEO incentives, while the value from reduced takeover frictions is primarily captured by acquirers. We find that activists have an information advantage, which is critical to overcoming the free rider problem in activist intervention.
Presented by: Francesco Celentano, University of Lausanne and Swiss Finance
Session 5: Corporate Finance and Governance 2 August 6, 2026 10:40 to 12:00
Session Organizer: ,
Session type: invited
Firms' Foreign Exchange Hedging Abstract This paper combines evidence from 1.5 million foreign exchange derivatives contracts with a dynamic risk management model to propose a new view of currency hedging by Eurozone firms. We find that (i) firms facing more currency risk hedge a larger fraction of that risk, (ii) firms rarely post collateral and when they do, it is small, (iii) trading costs are small, and (iv) cash positions are uncorrelated with hedging. These facts are inconsistent with standard models in which firms hedge to manage financing needs but are constrained by collateralization. To understand what financial frictions explain currency hedging, we build and estimate a dynamic risk management model. Our estimation implies that dividend smoothing explains most of hedging demand, while hedge adjustment costs limit hedging.
Presented by: Nicolas Hommel, Princeton University
Human Capital, Competition and Mobility in the Managerial Labor Market Abstract We pose a structural model of the managerial labor market with general and firm-specific human capital accumulation, managerial bargaining power, and imperfect labor market competition. Empirically, firm-specific skill drives wage growth and variability over careers; it also restricts mobility and helps explain the low rate of external CEO hiring. We decouple bargaining power from labor market competition in managerial rent extraction, with competition accounting for a substantial share, especially for poached CEOs. Firm-specific skill accumulation increases match productivity between firms and managers, shaping the dynamics of rent extraction by raising rent growth over tenure while dampening it over experience.
Presented by: John Barry, Rice University
Session 6: Intermediation, Credit and Innovation August 6, 2026 13:30 to 15:30
Session Organizer: ,
Session type: invited
Differential returns to securitization: Evidence and Impact Abstract This paper studies market power along the supply chain of mortgages by leveraging a unique data set that provides information on prices at each link on the chain. We document large and systematic differences in expected loan duration across issuers. Conditional on borrower and contract attributes, high quality issuers manage portfolios of loans that are significantly less exposed to prepayment risk, while low quality issuers produce securities that are more likely to prepay early. Moreover, those differences in expected duration allow some issuers to sell loans at a premium in the secondary market by issuing customized securities with higher expected cash flows rather than selling them in multi-issuer pools where investors do not observe the characteristics of the individual loans. We find that issuers with systematically better pools (in terms of expected duration) indeed receive higher prices on average in the secondary market. We then examine whether these returns are passed through to the wholesale market and ultimately to borrowers. Our findings suggest that there is little pass-through, implying that customization generates market power for those issuers able to customize their securities.
Presented by: Jean-Francois Houde, University of Wisconsin-Madison
FINANCIAL INTERMEDIATION IN THE EUROPEAN EMISSIONS MARKET: AN EMPIRICAL ANALYSIS Abstract The foundational literature on cap-and-trade establishes that emission allowance markets achieve cost-effective allocations under competitive equilibrium. Competitive equilibrium, however, requires aWalrasian price-clearing mechanism that is rarely available in practice. In the European Union Emissions Trading System, regulated firms and financial intermediaries trade across multiple platforms that differ in access costs, pricing rules, and the role of search, creating frictions that the competitive benchmark abstracts away. Using a novel transaction-level dataset constructed from the European Union Transaction Log, which traces each firm’s trading activity across government auctions, the exchange limit-order market, and over-the-counter bilateral trades, we document patterns inconsistent with the competitive benchmark. These include persistent cross-platform price dispersion, inefficient inventory holdings, and active financial intermediation. We develop a continuous-time search and matching model that captures these institutional features. Heterogeneous emitters choose which platforms to access, how intensely to search for over-the-counter counterparties, and how much to trade. Symmetric financial intermediaries buy from surplus firms and sell to deficit firms, earning an intermediation spread that exists because of frictions. The model nests competitive equilibrium where intermediaries are redundant as a benchmark, and the gap between the two equilibria provides the metric for measuring the cost of frictions and the value of intermediation. We develop a parametric version of the model and establish identification of the structural parameters. Estimation is in progress. The estimated model will enable counterfactual analysis of market design, including the welfare consequences of financial participation.
Presented by: Robert Miller, Carnegie Mellon University
Start-up Financing, Entry and Innovation Abstract Venture capital (VC) is the key source of financing for high-growth start-ups, but with few alternatives, limited access can leave viable projects unfunded and constrain innovation. I develop and estimate an equilibrium model of the VC market to quantify these distortions in the US, explain cross-country differences in VC activity, and diagnose VC's sectoral concentration. In the model, entrepreneurs and VCs meet in a frictional matching market and VCs endogenously stage capital injections over time to limit losses from hidden failure by entrepreneurs; however, reliance on follow-on funding exposes the start-up to premature closure if funding does not materialise. The model maps directly to observed funding histories, enabling estimation and policy counterfactuals. For US start-ups first funded in 2005–2015, my estimates suggest that 40% shut down despite having positive continuation value; with continued funding, half would reach an acquisition or IPO. I then estimate the model on UK microdata and find that financing conditions and acquisition opportunities, not project quality, drive US–UK differences; financing conditions account for two-thirds of the entry gap. Because UK start-ups struggle to reach late-stage rounds, retargeting existing support towards late-stage start-ups improves outcomes. Finally, the theory offers an explanation for VC's concentration in software and services: frictions are least severe for short-horizon projects with ample acquisition opportunities. Absent frictions, the share of VC-backed software and services start-ups falls from 61% to 53%, offset by gains in science-based sectors.
Presented by: Charles Parry, University of Cambridge
Session 7: Flash Session 2 August 6, 2026 15:45 to 16:30
Session Organizer: ,
Session type: invited
Intermediary Asset Pricing in Over-the-Counter Markets Abstract We show that in over-the-counter (OTC) markets with risk-averse intermediaries, asset prices depend on the entire distribution of dealer inventories---not just their average level. We derive closed-form solutions in which the mean and variance of dealer holdings are jointly sufficient statistics for prices. An increase in dealer balance sheet costs lowers average inventories and dispersion and raises the asset price; increased dealer risk-aversion raises inventories but shifts activity toward the interdealer market. We structurally estimate the model using dealer inventories and transactions from the corporate bond market and compute counterfactuals for regulatory relief and central bank demand support. In cross-sectional regressions, controlling for inventory dispersion flips the sign of the inventory-level effect on credit spreads: expanded dealer balance sheets ease price pressures once dispersion is held fixed, while higher dispersion raises spreads. The dispersion of dealer inventories thus may recontextualize the classic intermediary leverage factor.
Presented by: Benjamin Iorio, Carnegie Mellon University
A Model of Bank Failures: Funding Frictions and the Dynamics Before Collapse Abstract This paper develops a quantitative model of bank failures to study how funding maturity and debt dilution shape balance-sheet dynamics and the timing of default. Empirically, banks approaching failure increase leverage, rely more heavily on time deposits, and experience compressing net interest margins and rising credit losses. Motivated by these patterns, the model features heterogeneous banks that choose between short-and long-maturity liabilities under limited commitment and capital regulation. Time deposits reduce rollover risk and smooth liquidity needs, but because equity can be rebuilt only through retained earnings, long-maturity funding creates incentives to dilute outstanding creditors through additional issuance. This debt-dilution channel amplifies fragility as fundamentals deteriorate, generating endogenous default and reproducing key pre-failure dynamics observed in the data. Overall, the results highlight liability side incentives as a central driver of bank fragility.
Presented by: Joao Pedro Rudge Leite, Pennsylvania State University
Learning from the Market: The Choice Between IPOs and SPAC Mergers Abstract How should regulators treat corporate projections? In the going-public process, SPAC mergers historically allowed firms to share projections with lower legal liability than traditional IPOs, until the SEC’s January 2024 rule. Using transcripts from 709 SPAC mergers, I show these forward-looking statements were common practice and made up about 10 percent of sentences. I estimate a dynamic learning model using U.S. going-public attempts from 2010 to mid-2023 to quantify the rule’s equilibrium tradeoff between investor protection and capital formation. The counterfactual implies tighter liability avoids $5.75B in investor losses but lowers firm value by $9.80B, a net cost of $4.05B.
Presented by: Yuchi Yao, University of Oregon

 

This program was last updated on 2026-06-03 11:08:37 EDT