We analyze the role of nonbank lenders in the transmission of monetary policy using data on the universe of unsecured credit to firms and households in Denmark. Nonbanks increase their credit supply after a monetary contraction, both relative to banks and in absolute terms. The increase in nonbank lending is financed through increased long-term debt. A model with segmented debt markets featuring differential investor rate sensitivities rationalizes these findings. Nonbank credit insulates corporate investment and household consumption from monetary contractions, with positive spillovers extending beyond nonbank clients through industry and geographic channels.

Selected presentations: European University Institute, CEMFI, IBEFA Young Economist Seminar Series, Midwest Finance Association Annual Meeting 2022, SFS Cavalcade North America 2022, 8th Emerging Scholars in Banking and Finance Conference, Federal Reserve Board, Challenges for Financial Intermediaries conference (Deutsche Bundesbank), 9th IWH-FIN-FIRE Workshop (IWH Halle)

I study the effects of central clearing in over-the-counter derivative markets in a simple model of derivative trading. When risk-sharing is limited by moral hazard problems facing protection sellers, central counterparties (CCPs) facilitate risk-sharing by mutualizing idiosyncratic counterparty risk and economizing on costly margin calls. When clearing members' defaults are correlated, CCPs mutualize losses across its members. CCPs facing their own moral hazard problems can be induced to manage risk prudently by absorbing losses with CCP capital. A clearing fee can compensate CCPs for raising costly capital but may be prohibitively costly, warranting a return to bilateral trading.

We show that depositors' investments into equities and debt securities (market-priced savings, or MPS) shape deposit market power and monetary policy transmission. Using administrative data covering all deposit accounts in Denmark matched to each depositor's complete financial portfolio, we find banks pass through 2.5 percentage points more of policy rate changes in municipalities where their depositors hold more MPS. Despite this higher pass-through, deposit rates still lag policy rates: MPS holders respond by reducing deposits 3.4 percentage points more per 100 basis point increase. These outflows propagate to credit supply, with high-MPS banks reducing lending 1.5 percentage points more per 100 basis points of tightening. Evidence from 175 euro area banks confirms these patterns, revealing that competition from outside the banking system constrains deposit pricing beyond traditional market concentration.

We study how increasing deposit insurance coverage during a crisis distorts deposit and credit allocation. Exploiting a reform of Denmark's deposit insurance scheme during the Global Financial Crisis with comprehensive administrative datasets, we analyze the effects on deposit allocation. We find that individual depositors impose market discipline on weaker banks through withdrawals of uninsured deposits, but expanded insurance coverage disrupts this mechanism. This disproportionately benefits weaker banks, enabling them to expand lending to lower-quality firms that subsequently default without appropriate risk pricing. Our results highlight the trade-off between short-term financial stability and the costs of increasing deposit insurance coverage.

This paper studies the real effects of bail-ins on uninsured retail depositors, their firms and their workers. We exploit the unique bail-ins of two Danish banks during the 2008 global financial crisis, after which their depositors lost part of their uninsured deposits. Using administrative data covering all retail depositors in Danish banks, we find that uninsured depositors at bailed-in banks experienced a larger decrease in consumption after the bail-in than uninsured depositors at surviving banks. This effect was mainly driven by self-employed uninsured depositors, who use their personal deposits as working capital to run their businesses, and not by non-self-employed uninsured depositors, who are rich and diversified enough to smooth out their consumption after the bail-in. Firms owned and workers employed by uninsured self-employed individuals at bailed-in banks did also suffer more after the bail-in relative to firms owned and workers employed by uninsured self-employed individuals at surviving banks.

We model interactions between investors, mutual funds, and liquidity providers to compare regulatory approaches for managing fund liquidity risk. Investor redemptions trigger asset sales by mutual funds, potentially causing fire sales when endogenous market liquidity becomes scarce. A pecuniary externality arises as liquidity providers fail to internalize price impacts, resulting in inefficiently low market liquidity. Liquidity requirements increase system-wide resilience despite partially crowding out private liquidity provision. In contrast, redemption restrictions undermine liquidity providers' incentives, potentially increasing fire-sale risk and reducing welfare. Effective regulation depends on its general equilibrium impact on liquidity providers' ex-ante incentives, not merely its direct effect on funds.