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Working Paper
Clean Money, High Costs?
A cornerstone of the law-and-finance literature is that stronger institutions reduce financial intermediation costs. Using global data on cross-border payment costs, I show this relationship can reverse in heavily regulated sectors. Anti-money laundering risks have larger cost effects in advanced economies with strong enforcement than in developing countries with weak enforcement, despite the former having lower underlying risks. This counterintuitive pattern reflects strong institutions operating through two channels: Directly reducing costs through risk mitigation and forcing risk-based ...
Journal Article
An Introduction to Web3 with Implications for Financial Services
Web3 is used to describe the next iteration of the internet in which decentralized services are automated on blockchains. This paper describes the elements of Web3 including blockchains and tokens. It describes the largest decentralized finance protocols and some specific services where blockchain and tokens can be used. The paper concludes with a brief discussion of some regulatory challenges.
Working Paper
Subnational Bilateral Remittance Flows in the U.S.-Mexico Corridor: A Multi-Source Imputation and Validation
More than $65 billion annually flows through Mexico’s remittance corridor, the largest such pathway in the Western Hemisphere. Yet, the distribution of these flows across regions and the implications for financial inclusion—or alternatively, perpetuating inequality—remain poorly understood. This paper exploits bilateral remittance flows between U.S. and Mexican states during 2013–25 to construct and validate a multi-source origin–destination framework linking Banco de México’s U.S.-state outflows with Mexican state-level receipts. We develop allocation matrices from consular ...