We document market power in U.S. equity securities lending and examine its origins and consequences. We develop a dynamic model of securities lending and estimate it on the cross-section of U.S. equities, showing that the dominant custodian-intermediated market structure emerges...

We study a financial advisory market in which low product relevance makes investor search unprofitable without intermediation. The advisor activates the market by recommending high-relevance products, financed by commissions from firms. Raising the regulatory penalty tightens the advisor's recommendation standard....

We develop a model of ESG investing where firms have private information about their ESG commitment: some value non-pecuniary payoffs from green investment, while others opportunistically greenwash. Lenders choose whether to include an ESG-monitoring covenant that imperfectly detects greenwashing. Monitoring...

Using a model of index-linked rebalancing around reconstitution events, we show front-runners provide liquidity to index investors and benefit them. Index investors trade off execution costs against tracking-error concerns, while speculators maximize trading profit. In competitive markets, even loose index...

This paper presents a dynamic model of firm financing where firms use financial slack to reduce rent extraction by financiers with bargaining power. Financing is lumpy because it is optimal to bargain infrequently. Moreover, firms may finance ‘early’ before exhausting...

Government guarantees generate a multiplier effect: one dollar of tax-funded guarantees expands lending by more than one dollar. This multiplier is stronger under information-insensitive debt, as guarantees suppress costly private information production, relaxing borrowing constraints for all firms rather than...