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Discussion Paper
The Rise of the Originate-to-Distribute Model and the Role of Banks in Financial Intermediation
In yesterday’s post, Nicola Cetorelli argued that while financial intermediation has changed dramatically over the last two decades, banks have adapted and remained key players in the process of channeling funds between lenders and borrowers. In today’s post, we focus on an important change in the way banks provide credit to corporations—the substitution of the so-called originate-to-distribute model for the originate-to-hold model. Historically, banks originated loans and kept them on their balance sheets until maturity. Over time, however, banks began increasingly to distribute the ...
Working Paper
REORGANIZATION OR LIQUIDATION: BANKRUPTCY CHOICE AND FIRM DYNAMICS
In this paper, we ask how bankruptcy law affects the financial decisions of corporations and its implications for firm dynamics. According to current U.S. law, firms have two bankruptcy options: Chapter 7 liquidation and Chapter 11 reorganization. Using Compustat data, we first document capital structure and investment decisions of non-bankrupt, Chapter 11, and Chapter 7 firms. Using those data moments, we then estimate parameters of a firm dynamics model with endogenous entry and exit to include both bankruptcy options in a general equilibrium environment. Finally, we evaluate a bankruptcy ...
Speech
The Federal Reserve’s Corporate Credit Facilities: Why, How, and For Whom
Remarks at The U.S. Chamber of Commerce’s Center for Capital Markets Competitiveness (delivered via videoconference).
Journal Article
Anchors Aweigh: Why Do Anchor Institutions Matter?
In many cities, the expectation of civic leadership from a few large corporations headquartered downtown has ebbed. Instead, cities are looking to nonprofit anchor institutions, such as universities, hospitals, and museums, to support economic development and other goals. As Eugenie Birch, co-director of the Penn Institute for Urban Research and one of the panelists at a Reinventing Older Communities session on anchor institutions, put it, ?Universities are the factories of the 21st century.?