I am a Senior Economist at the Board of Governors of the Federal Reserve System. Before joining the Board, I received a Ph.D. in Finance from Tilburg University in the Netherlands.
My research interests lie in the microstructure of decentralized over-the-counter (OTC) bond markets. My papers focus on liquidity, trading frictions, and dealer intermediation. In particular, I study bond dealers in their role as liquidity providers and their interactions with nonbank financial institutions.
In my policy work, I monitor developments in international corporate bond markets, focusing on assessing credit risks. Additionally, I serve as a topic specialist for sustainable debt markets.
Published & Forthcoming Papers
joint with John Caramichael
Examines the borrowing cost advantage for firms issuing green bonds compared to conventional ones, finding that green bonds, on average, have slightly lower yield spreads due to demand pressure at issuance. This benefit emerges as of 2019 and is primarily observed among large, investment-grade issuers in developed economies.
Journal of Banking & Finance, 2024, Vol. 162, 107126.
Media: Financial Times Moral Money, Bloomberg Money Stuff, Financial Times, Bloomberg News
joint with Jessica Shi Li, Maureen O'Hara, and Xing (Alex) Zhou
Investigates the impact of bond portfolio trading on corporate bond liquidity, revealing that this trading innovation generally enhances liquidity, especially for riskier and illiquid bonds, due to dealers' ability to hedge and diversify inventory risks. However, during market stress, the benefits diminish, and portfolio trading can become very costly, highlighting its limitations as a solution for bond market illiquidity.
Under Review: R&R
joint with Maureen O'Hara, and Xing (Alex) Zhou
Examines the role of insurance companies in enhancing corporate bond market resiliency during the COVID-19 liquidity crisis. Finds that insurers with stable funding, on net, bought bonds facing fire sales from mutual funds, thereby supporting market liquidity and stabilizing bond prices through their funding advantage and established trading relationships with dealers.
Under Review: R&R
Media: Institutional Money
joint with Martin Waibel
Investigates how Basel regulations affect corporate bond intermediation, revealing that bank dealers markedly reduce their bond inventories near quarter ends. This behavior results in significant liquidity impairments, especially for balance sheet-intensive trades, and leads bank dealers to offload large bond positions to nonbank financial institutions at discounted prices close to reporting dates.
joint with Mariassunta Giannetti, Chotibhak Jotikasthira, and Martin Waibel
Explores how the Basel III leverage ratio requirement on bank dealers has led bond mutual funds to benefit from taking on a greater role in liquidity provision for investment-grade corporate bonds. However, this shift has also increased the susceptibility of these bonds to disruptions due to outflows from the mutual fund industry, as evidenced by the severe deterioration in liquidity and returns during the onset of the COVID-19 pandemic.
joint with Marcelo Ochoa
Studies how transitioning from coal to low-carbon energy sources affects municipal finances in U.S. coal communities, using the rise of hydraulic fracking as a case study. Finds that declining coal mining activity increases municipal debt and long-term borrowing costs, and weakens debt sustainability indicators, with the most significant effects seen in coal counties highly exposed to natural gas production.
[This paper is being revised and updated]
[This paper is being revised and updated]
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