Finance

- October 2025
- Case
Cabana: Transforming the Fragmented US Pool Services Industry

By: Randolph B. Cohen, Matthew Sutton and Olivier Porte
- October 2025
- Case
Cabana: Transforming the Fragmented US Pool Services Industry

By: Randolph B. Cohen, Matthew Sutton and Olivier Porte
- October 2025
- Case
Credit Opportunities During Covid-19

By: Sebastian Hillenbrand and William Vrattos

During COVID-19, Credit Analyst Jack Land considers a large list of bonds which have declined in price.
- October 2025
- Case
Credit Opportunities During Covid-19

By: Sebastian Hillenbrand and William Vrattos

During COVID-19, Credit Analyst Jack Land considers a large list of bonds which have declined in price.
- 2025
- Working Paper
Bond-Stock Comovements

By: John Y. Campbell, Carolin E. Pflueger and Luis M. Viceira

This paper documents that during the late 20th Century, nominal government bonds and stocks tended to comove positively, whereas during the first quarter of the 21st Century they have tended to comove negatively. A similar sign switch is observable for real government bonds and breakeven inflation rates. Recent macroeconomic events have caused short-lived changes in these comovements, and periods with high risk premia tend to be periods in which bond-stock comovements are large in absolute value. The paper surveys theoretical models of these phenomena.
- 2025
- Working Paper
Bond-Stock Comovements

By: John Y. Campbell, Carolin E. Pflueger and Luis M. Viceira

This paper documents that during the late 20th Century, nominal government bonds and stocks tended to comove positively, whereas during the first quarter of the 21st Century they have tended to comove negatively. A similar sign switch is observable for real government bonds and breakeven inflation rates. Recent macroeconomic events have caused...

About the Unit

Our strategy is to assemble and nurture a faculty whose interests and skills complement each other, and who work well together:

a) to produce a broad range of finance-related research that is published in top-tier scientific and practitioner journals, and that addresses issues of present and future importance to managers (including regulators and policy makers);

b) to develop highly-relevant and intellectually rigorous MBA and executive education courses; and

c) to mentor future academics through the Business Economics doctoral program.

Our applied focus and access to business organizations are major advantages which are reinforced by our students and our case-based approach. We have a faculty with broad expertise, and we have resources, field contacts, and institutional support, all of which we can leverage to do richer work and be more productive than we could at other institutions.

Recent Publications

Cabana: Transforming the Fragmented US Pool Services Industry

By: Randolph B. Cohen, Matthew Sutton and Olivier Porte

October 2025 |
Case |
Faculty Research

Citation

Educators

Credit Opportunities During Covid-19

By: Sebastian Hillenbrand and William Vrattos

October 2025 |
Case |
Faculty Research

During COVID-19, Credit Analyst Jack Land considers a large list of bonds which have declined in price.

Keywords: Credit

Citation

Educators

Purchase

Bond-Stock Comovements

By: John Y. Campbell, Carolin E. Pflueger and Luis M. Viceira

2025 |
Working Paper |
Faculty Research

This paper documents that during the late 20th Century, nominal government bonds and stocks tended to comove positively, whereas during the first quarter of the 21st Century they have tended to comove negatively. A similar sign switch is observable for real government bonds and breakeven inflation rates. Recent macroeconomic events have caused short-lived changes in these comovements, and periods with high risk premia tend to be periods in which bond-stock comovements are large in absolute value. The paper surveys theoretical models of these phenomena.

Citation

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The Retail Habitat

By: Toomas Laarits and Marco Sammon

October 2025 |
Article |
Journal of Financial Economics

Retail investors trade hard-to-value stocks. Controlling for size, stocks with a high share of retail-initiated trades are composed of more intangible capital, have longer duration cash-flows and a higher likelihood of being mispriced. Consistent with retail-heavy stocks being harder to value, we document that such stocks are less sensitive to earnings news. As an additional consequence, the well-known earnings announcer risk premium is limited to low retail stocks only. Further, high-retail stocks are more sensitive to retail order flow and are especially expensive to trade around earnings announcements. Overall, the findings document a new dimension of investor heterogeneity and suggest the comparative advantage of retail in holding hard-to-value stocks.

Keywords: Retail; Retail Trade; Intangible Capital; Mispricing; Institutional Investing; Stocks; Valuation

Citation

Measurement and Effects of Bank Exit Policies

By: Daniel Green and Boris Vallée

October 2025 |
Article |
Journal of Financial Economics

We study whether exit policies by financial institutions have financial and real consequences on the firms they target, using bank coal exit policies as a laboratory. In contrast to theories assuming high capital substitutability, we find large effects of these policies. Bank exit policies negatively affect both the financing and operation of coal assets. Substitution to other sources and providers of capital appears to be limited. Coal power plants owned by firms exposed to exit policies are more likely to retire, translating into lower CO2 emissions. Exit policies have reduced CO2e emissions from energy production by an estimated 0.62 gigaton.

Keywords: Coal Power; Financing and Loans; Banks and Banking; Policy; Energy Industry

Citation

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Arbitrage Capital of Global Banks

By: Alyssa G. Anerson, Wenxin Du and Bernd Schlusche

October 2025 |
Article |
Journal of Finance

We show that the role of unsecured, short-term wholesale funding for global banks has changed significantly in the post-financial-crisis regulatory environment. Global banks mainly use such funding to finance liquid, near risk-free arbitrage positions—in particular, the interest on excess reserves arbitrage and the covered interest rate parity arbitrage. In this environment, we examine the response of global banks to a large negative wholesale funding shock as a result of the U.S. money market mutual fund reform implemented in 2016. In contrast to past episodes of wholesale funding dry-ups, we find that the primary response of global banks to the reform was a cutback in arbitrage positions that relied on unsecured funding, rather than a reduction in loan provision.

Keywords: Governing Rules, Regulations, and Reforms; Banks and Banking; Interest Rates; Financing and Loans

Citation

Purchase

Segmented Arbitrage

By: Emil Siriwardane, Adi Sunderam and Jonathan Wallen

October 2025 |
Article |
Journal of Finance

We use arbitrage activity in equity, fixed income, and foreign exchange markets to characterize the frictions and constraints facing intermediaries. The average pairwise correlation between the 32 arbitrage spreads that we study is 22%. These low correlations are inconsistent with canonical intermediary asset pricing models. We show that at least two types of segmentation drive arbitrage dynamics. First, funding is segmented—certain trades rely on specific funding sources, making their arbitrage spreads sensitive to localized funding shocks. Second, balance sheets are segmented—intermediaries specialize in certain trades, so arbitrage spreads are sensitive to idiosyncratic balance sheet shocks.

Keywords: Financial Intermediation; Arbitrage; Intermediary-based Asset Pricing; Finance; Segmentation

Citation

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Purchase