We document a significant role for nonbanks in financing the green transition following the Paris Agreement, primarily through lending partnerships with banks. Using textual analysis to identify green loans, we show that nonbanks participate in a greater number of green syndicated loans and commit larger amounts in response to corporate demand for green financing. Such nonbank investment in green loans is associated with more favorable loan terms and is consistent with a nonbank-led expansion in credit supply rather than bank-driven risk offloading. Nonbank investment is highly sensitive to policy signals, suggesting that regulatory transition risk is a key driver. Overall, our findings show the potential for nonbanks to support the transition but only under credible political commitment to climate goals.

We evaluate the joint impact of structural liquidity regulation and unconventional monetary policy on Eurozone banks’ lending. Using an extensive bank-level quarterly dataset from 2008 to 2020, we study the introduction of the Net Stable Funding Ratio (NSFR) under Basel III and the European Central Bank’s Longer-Term Refinancing Operations (LTROs) and Targeted LTROs (TLTROs). We find that while the NSFR had no effect on aggregate lending, it led to an increase in short-term lending and a reduction in long-term lending, consistent with lower maturity transformation. LTRO participation is associated with higher medium- and long-term lending, and our results indicate that this effect is conditional on banks’ structural liquidity positions: banks with rising NSFRs were able to use LTRO and TLTRO funding to sustain long-term credit supply. These findings suggest that central bank liquidity interventions can mitigate the adjustment costs of tighter liquidity regulation during the transition period, enabling banks close to regulatory compliance to maintain longer-maturity lending.

We empirically study how banks’ conversions from mutual to stock ownership affect depositor welfare. Using U.S. data and a discrete choice model of deposit account demand, we show that when a bank is mutual, depositors are less sensitive to price, and each unit of cash and liquidity services is valued more positively. We then examine how mutual-to-stock conversions affect deposit account characteristics and combine these changes with our demand estimates to assess conversions’ impact on depositor welfare. Our estimates indicate that conversions increase depositor welfare, challenging the premise that mutual banks operate for the benefit of their members.

We examine global bank lending during geopolitical conflicts. Exploiting Russia’s 2014 countersanctions on the European agricultural industry, we analyze global banks’ syndicated lending to affected firms. We document a significant increase in credit supply to the sanctioned industry, accompanied by a significant increase in the shares of loans with lower spreads and longer maturities. The expansion of credit is not driven by incumbent banks alone. Instead, banks with little prior exposure to agriculture—particularly foreign banks headquartered in alternative export destinations where European firms are likely to redirect trade—account for a considerable proportion of the increased lending. This finding suggests banks actively rebalance their loan portfolio and strategic positioning in response to shifting trade flows. Our findings highlight the role of banks as intermediaries that adjust credit allocation across sectors during geopolitical disruptions, thereby cushioning targeted industries and facilitating their transition toward new markets.

We study gender differences in on-time loan payment responsiveness to collection mechanisms using randomized dunning text messages sent to 17,545 FinTech borrowers. Reminder text messages significantly reduce delinquency rates relative to a no-message control, with messages incorporating social or financial incentives proving more effective. Women are more responsive to social pressure, while men are more sensitive to financial incentives. These results are robust to observable control variables and matching methods. Channel analyses indicate that gender differences in responsiveness to the existence and size of the incentive explain the observed gender differences under the social incentive treatment. However, only gender differences in sensitivity to the existence of incentives explain the gender difference in financial incentive treatments. These findings inform practitioners and policymakers that some seemingly gender-neutral practices may create unintended gender disparities in financial markets.

We study information substitutability in the financial market through a quasi-natural experiment: the pandemictriggered lockdown that has hampered people's physical interactions hence the ability to collect, process, and transmit interaction-based information. Exploiting the cross-sectional and time-series variations of lockdown and its implications on proximate investment, we investigate how the difficulty of collecting information through physical interactions has prompted a switch to electronic interactions including synchronous interactions such as virtual meetings and asynchronous ones like collecting information from the internet. We show that local-investing funds (LIFs) that mostly relied on physical interactions to access information before the pandemic had even worse performance than other funds, though the difference in performance was insignificant before the lockdown. Moreover, LIFs rebalance portfolios toward faraway stocks due to portfolio diversification and risk reduction. These findings indicate that physical-interaction-based and electronic-based information is not fully substitutable. We also show that the advantages of human-interaction-based information originate mainly from physical contacts, primarily in cafés, restaurants, bars, and fitness centers; and the virtual world based on Zoom/Skype/Team can provide a buffer but cannot substitute personal meetings in generating sufficient information.