How much information about financial institutions' balance sheets should regulators pass on to the market? To minimize the probability of inefficient default, the regulator optimally designs a disclosure regime that imposes transparency when the firm has weak fundamentals and opacity,...

A liquidity-constrained asset owner designs an asset-backed security to raise funds from an informed liquidity supplier. Information insensitive securities reduce the liquidity supplier's informational rents. The issuer optimally screens the liquidity supplier's private information by offering a menu of debt...

We characterize the conditions under which a socially responsible (SR) fund induces firms to reduce externalities, even when profit-seeking capital is in perfectly elastic supply. Such impact requires that the SR fund's mandate permits the fund to trade off financial...

We analyze the run risk of fiat-backed stablecoins by uncovering a fundamental dilemma between stablecoins’ price stability and financial stability. We show that panic runs exist even though general investors only trade stablecoins in secondary markets with flexible prices. This...

We develop a theory of financial innovation in which both market structure and the payoffs of the claims being traded are determined endogenously. Intermediaries use the cash flows of an underlying asset to design securities for investors. Demand for securities...

We model the dynamic competition among national fiat currencies, cryptocurrencies, and Central Bank Digital Currencies (CBDCs), whereby countries strategically digitize their currency and launch CBDC in response to competition from emerging cryptocurrencies and other currencies. Countries with strong but non-dominant...