OMDS Finance Seminar

(formerly Brown Bag Seminar)

Department members are encouraged to regularly present current research and research ideas at an early stage in the weekly departmental lunch seminar. Occasionally, cooperation partners are also invited to present their work in progress. The seminar is organised by our post-docs. Students of the master's program in Banking and Finance are welcome to attend.

Upcoming Seminars in SS 2026

Speaker: Vladimir Vladimirov (University of Amsterdam)
Title: Impact Through Catalytic Finance (with Florian Hoffmann)
Time: Wednesday, June 17, 12 – 1 pm
Location: Seminar Room 5 (1-floor), OMP-1
Abstract: Impact investments requiring industry-wide adoption often stall because of a coordination trap: success depends on both individual firm effort and sufficient peer uptake, creating strategic complementarities. We study optimal financing by an impact investor who seeks to uniquely implement universal adoption while maximizing her guaranteed payoff. In this coordination environment with hidden effort, inducing coordination generally requires distorting firms' effort incentives. To manage this trade-off, the impact investor finances an endogenously chosen critical mass of firms using distortive concessionary contracts, which unlocks competitive, non-concessionary financing for the remaining firms. Unlike uniform taxes or subsidies, optimal impact financing is discriminatory in both instrument (e.g., debt vs. equity) and contractual terms, and its costs depend critically on how this heterogeneous financing is allocated across firms. Concessionary terms are optimally directed toward smaller, less efficient firms with high opportunity costs, whereas larger, better-run firms---essential for adoption---are financed at (near-)competitive terms.

Speaker: Yenan Wang (University of Amsterdam)
Title: The Fragile Promise: Job Security and Contract Design under Partial Commitment (joint with Liang Dai and Ming Yang)
Time: Wednesday, March 25, 12 – 1 pm
Location: Seminar Room 6 (1-floor), OMP-1
Abstract: We develop a dynamic contracting framework to study how partial commitment power affects long-term employment relationships. In a continuous-time moral hazard model, the principal can alter the contract at random, exogenously timed alteration opportunities, with the arrival rate measuring her (lack of) commitment power. Our results depend on the relative observability of diligence and misconduct. For guardian jobs, where misconduct is easier to observe, it is optimal to offer a static, permanent contract that pays fixed performance bonuses for observed diligence and remains immune to reductions in commitment power. For entrepreneurial jobs, where diligence is easier to observe, the optimal structure features an initial probation period, a promotion bonus upon achieving permanence, and a return to probation at each alteration opportunity. In this case, weaker commitment can, under certain conditions, improve welfare; if commitment power is already low, further reductions may yield Pareto improvements. Reduced commitment power also raises required promotion and performance bonuses, shortens probation, and accelerates the decline in promotion bonuses over time.

Speaker: Roberto Pinto (Lancaster University)
Title: Cash in Motion: Corporate Liquidity and Unsecured Bank Funding
Time: Wednesday, April 29, 12 – 1 pm
Location: Seminar Room 3 (1-floor), OMP-1
Abstract: Non-financial corporations (NFCs) hold large cash balances, yet little is known about how this liquidity is deployed and whether it matters for bank funding. Using granular ECB administrative data linking firms and banks, we show that NFCs are major suppliers of unsecured wholesale funding, accounting for about 35% of euro-area market volume. On average, firms place roughly 24% of their cash in short-term bank instruments, partly financing these positions through borrowing and actively reallocating liquidity across banks. Exploiting quasi-natural experiments---the ECB’s 2022 rate hikes and the COVID-19 shock---we show that firms actively trade off liquidity and return while continuing to supply a stable source of funding during economy-wide disruptions. Our findings indicate that corporate cash holdings play an intermediation-like role, revealing a novel channel through which corporate liquidity management shapes bank funding.

Speaker: David Pothier (University of Vienna)
Title: Central Bank Counterparties and Liquidity Policy (with Dong Beom Choi, Philipp Koenig, and Tanju Yorulmazer)
Time: Wednesday, May 13, 12 – 1 pm
Location: Seminar Room 3 (1-floor), OMP-1
Abstract: Which financial intermediaries should be granted access to central bank liquidity facilities? We study how the central bank's choice of counterparties affects its optimal liquidity policy. Financial intermediaries create private money by issuing short-term debt backed by the collateral value of their assets. Admitting financial intermediaries as counterparties relaxes their collateral constraints by giving them access to the central bank's balance sheet. While regulated banks' money creation can be controlled by prudential regulation, shadow banks can circumvent regulation, which breeds moral hazard. If the central bank can optimally calibrate counterparty access, its liquidity policy is time-consistent. However, if the central bank is restricted to only offer counterparty access to regulated banks, a time-inconsistency problem emerges.

Speaker: Simon Loertscher (The University of Melbourne)
Title: Endogenous Demand and Oligopoly (with Bing Liu)
Time: Wednesday, May 20, 12 – 1 pm
Location: Seminar Room 3 (1-floor), OMP-1
Abstract: This paper shows that dropping the almost universally upheld assumption in monopoly and oligopoly models that the demand function the firms face is given has profound implications for the equilibrium behavior and policy prescriptions. Assuming that the mass of consumers who enter a market increases in the surplus they expect, we show that for homogeneous good models, the resulting deadweight loss of monopoly relative to the standard deadweight loss is unbounded. Under Cournot competition, per-firm profit is not necessarily maximized by monopoly, socially deficient free entry by firms and coordination failure in entry are generic features of the model while mergers to monopoly need not be profitable before consumers enter but always are after consumers entered, which raises new questions and scope for industrial and competition policy. For Hotelling models with quadratic transportation costs, maximum differentiation vanishes when consumer entry is moderately sensitive to expected consumer surplus. When the elasticity of consumer entry to consumer surplus goes to infinity, we obtain Hotelling's principle of minimal differentiation. Applying worker entry to a Salop model provides a parsimonious and coherent explanation for the divergent developments across regions such as between the Silicon Valley and Massachusetts Route 128.

Speaker: Swarnodeep Homroy (University of Groningen)
Title: Legal Protection of Free Speech and Corporate Innovation
Time: Wednesday, June 3, 12 – 1 pm
Location: Seminar Room 3 (1-floor), OMP-1
Abstract: This paper examines the relationship between legal speech protections and corporate innovation. Exploiting the staggered adoption of anti-SLAPP statutes across U.S. states, I show that stronger speech protections increase patent applications, with effects concentrated in breakthrough patents, green patents, and new technology classes. Industry-level dispersion in innovation efficiency narrows following adoption. In a technology-screening mechanism, protecting free speech enhances the ability of various public stakeholders to disseminate information about the social costs of incumbent technology. Firms with high absorptive capacity pre-emptively patents new technology. These firms increase in market value, while the average affected firm suffers value loss.

Speaker: Sheran Deng (University of Vienna)
Title: Performance Measurement and Career Concern in the Age of AI
Time: Wednesday, June 10, 12 – 1 pm
Location: Seminar Room 15 (3-floor), OMP-1
Abstract: AI’s ability to substitute for costly human labor enables agents to accomplish more work, but it can also interfere with the principal’s ability to learn about agents’ abilities, which weakens the implicit incentives provided by career progress, particularly for high-skill agents. This paper analyzes the provision of explicit and implicit incentives in an organization with heterogeneous agents. We show that AI can induce the principal to shift the incentive system from one characterized by low salaries but strong career progression to one characterized by high salaries but weak career progression, or vice versa. We characterize when AI improves or reduces social welfare and also examine how AI affects the agents incentive to invest in skill.

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Past Seminars in WS 2025/2026

Speaker: Sonny Biswas (University of Reading)
Title: The Dichotomy of Concentration and Market Power in Banking (joint with Kostas Koufopoulos)
Time: Wednesday, Oct. 15, 12 – 1 pm
Location: Seminar Room 6 (1-floor), OMP-1
Abstract: In our model, banks face two informational frictions: limited pledgeability and effort moral hazard. Banks possess pricing power in the deposit market despite (cost-less) free entry and price competition – unlike in existing models, including those featuring capacity constraints. When pledgeability increases, banks can offer higher deposit rates and accept more deposits, which, in turn, leads to fewer banks. Thus, counterintuitively, but consistent with empirical evidence, equilibrium pricing power may decline as the number of banks falls (concentration increases). The markup exceeds the rent associated with either informational constraint alone and ranges between the monopoly and perfect competition outcomes.

Speaker: Sheran Deng (University of Vienna)
Title: (Counter)productive Responsible Capital in the Presence of Financial Frictions (with Tom Lee, CEU)
Time: Wednesday, Nov. 5, 12 – 1 pm
Location: Seminar Room 6 (1-floor), OMP-1
Abstract: We study the role of responsible investors in financing entrepreneurs who can develop projects with varying degrees of abatement abilities. When the planner is unconstrained in setting tax and subsidy, responsible capital does not affect the allocation in the absence of financial frictions. However, in the presence of financial frictions, responsible capital can worsen the allocation. Even with an arbitrarily small degree of aggregate social concern, there may no longer exist tax/subsidy rates that simultaneously provide incentives to entrepreneurs to develop the right projects ex ante and shareholders to make the right abatement decisions ex post. We (1) derive conditions for when responsible capital is beneficial; (2) the optimal distribution of social concern; (3) optimal policy choice.

Speaker: David Rivero (University of Navarra)
Title: Endogenous Bank Risks and the Lending Channel of Monetary Policy
Time: Wednesday, Nov. 19, 12 – 1 pm
Location: Seminar Room 6 (1-floor), OMP-1
Abstract: This paper develops a general equilibrium banking model where credit creation and payment flows endogenously link credit, liquidity, and solvency risks. Banks issue deposits at loan origination. As deposits circulate, reserve settlement creates liquidity exposure and repayment shortfalls generate credit and solvency risk. These risks are jointly determined by credit provision and bound balance sheet expansion at an internally determined profitability threshold rather than an external funding or capital limit. We present an application of the theory that provides a new look to the bank lending channel where monetary policy operates through the pricing of bank liabilities, compressing margins and curbing credit. Our quantitative results align with empirical observations, including comovement of policy rates with deposit spreads and net interest margins and a decline in deposit growth after tightening. The mechanism speaks to policy: calibrating liquidity and capital tools in isolation can blunt their effectiveness.

Speaker: Yuliyan Mitkov (University of Vienna)
Title: Bailouts and Financial Fragility Revisited
Time: Wednesday, Nov. 26, 12 – 1 pm
Location: Seminar Room 6 (1-floor), OMP-1
Abstract: Governments often respond to financial crises with fiscal transfers (“bailouts”) that partially cover investors' losses. When should such bailouts be constrained? We show that—even when ex-post bailouts are efficient and ex-ante moral hazard is fully corrected—allowing bailouts can increase the incidence of runs and reduce ex-ante welfare. This outcome arises when the government's fiscal capacity is limited, so anticipated bailouts are small, and is due to a novel interaction between endogenous run risk and limited commitment, which makes the financial system more prone to runs. Our model suggests that recent developments in the U.S. and elsewhere, which effectively unwind too-big-to-fail legislation, are likely to lead to financial instability.

Speaker: Can Gao (University of St.Gallen)
Title: No News is News: Volatility Speculation and Multidimensional Heterogeneous Beliefs
Time: Wednesday, Jan. 14, 12 – 1 pm
Location: Seminar Room 6 (1-floor), OMP-1
Abstract: This paper develops a theoretical model to explore the asset pricing implications of investors’ multi-dimensional belief heterogeneity, specifically distinguishing between disagreements over the frequency of news arrival and the content of news. Besides directional trades, investors could use derivatives to bet against each other and speculate on volatility: greater disagreement of this kind could give rise to more extreme derivative positions. When disagreement about news arrival frequency is low, volatility exhibits mean reversion because extreme optimists and pessimists incur substantial wealth losses amid intense market swings. In contrast, high disagreement about the news arrival rate leads to volatility persistence. If news is absent in such environments, volatility sellers dominate, and extreme payoffs are underweighted in the formation of market expectations, resulting in lower implied volatility—“no news” effectively becomes good news for risky asset valuations.

Speaker: Alessio Ozanne (University of Vienna)
Title: Agents under Pressure: Risk Governance under Preemptive Competition (with Matthieu Bouvard and Samuel Lee)
Time: Wednesday, Jan. 28, 12 – 1 pm
Location: Seminar Room 6 (1-floor), OMP-1
Abstract: Many markets feature competition on speed alongside the need to screen and control risk. We study a model in which agents race to identify trading opportunities while being incentivized both to search and to comply with firms’ internal risk-management protocols. Preemptive competition interacts with agency problems to generate robust constrained inefficiencies, manifested in deal-driven front-office cultures that firms may be unwilling to coordinate away from, because doing so would require paying higher agency rents. Because competition and compliance are jointly determined by agents’ contracts, compensation regulation emerges as a natural corrective instrument. Advances in artificial intelligence (AI) can aggravate or mitigate the incentive problem. If AI replaces human agents, the laissez-faire outcome may improve, but it may still be inferior to an outcome in which firms’ behavior is constrained by compensation regulation.

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Past Seminars in WS 2024/2025

Speaker: Sapnoti Eswar (University of St. Andrews)
Title: Cross-border Patenting and Corporate Debt Capacity
Time: Wednesday, Oct. 9, 12 – 1 pm
Location: Seminar Room 6, OMP-1
Abstract: We use global patent data and exploit the staggered adoption of the Patent Prosecution Highway, a patent examination cooperation program to evaluate the effect of globalization of patents on debt capacity of firms. We show that patents filed globally are of higher quality, and loans to patenting firms increases. This increase is driven by a reduction in information asymmetry in global lending markets. We also find that firms obtain international loans in low-tax countries which leads to a lower average tax burden. This lower burden creates a higher debt capacity for patenting firms.

Speaker: Andrew Winton (University of Minnesota)
Title: Slippery Slope or Tip of the Iceberg? A Model of Detected and Undetected Financial Misreporting (co-authored with Xiaoyun Yu)
Time: Wednesday, Oct. 23, 12 – 1 pm
Location: Seminar Room 6, OMP-1
Abstract: Recent empirical work suggests that most financial misreporting is undetected, so that detected cases are just "the tip of the iceberg". At the same time, based on a sample of detected cases, Schrand and Zechman (2012) argue for a “slippery slope” to fraud, where managers initially engage in relatively unintentional misreporting due to excessive optimism about firm prospects, and then are forced to misreport more and more when those prospects fail to materialize. We present a dynamic model of financial misreporting that combines slippery slope ideas with the problem of imperfect fraud detection. Although excessive optimism can magnify the problem, one can get the observed patterns even in the presence of perfectly rational managers and investors.

Speaker: Francesco Sannino (Frankfurt School of Finance and Management)
Title: Committing to Trade: A Theory of Intermediation
Time: Wednesday, Nov. 13, 12 – 1 pm
Location: Seminar Room 6, OMP-1
Abstract: In a “lemons” market, a shock to gains from trade is publicly observed just before buyers make their offer. When gains from trade are lower, prices contain a larger adverse selection discount. By trading with intermediaries beforehand, sellers commit not to keep high-quality assets in such states, which may improve surplus, despite impeding efficient use of available information. The distribution of agents' valuations and the level of uncertainty in gains from trade affect intermediaries' markups, traded assets' quality and volumes. In the optimal contract, intermediaries (inefficiently) ration buyers when gains from trade are lowest, as documented in the leveraged loans market.

Speaker: Sheran Deng (University of Vienna)
Title: A Model of Climate Change Mitigation and Adaptation Finance
Time: Wednesday, Dec. 11, 12 – 1 pm
Location: Seminar Room 6, OMP-1
Abstract: One of the biggest challenges in addressing the climate crisis is that poorer regions, which suffer the most from pollution caused by wealthier regions, often lack the resources to invest in mitigation and adaptation. How much mitigation and adaptation funding will wealthy regions provide? Will they prioritize divestment or funding mitigation and adaptation? What policies will planners adopt? In this paper, we develop a model to explore these questions.

Speaker: Christian Westheide (University of Vienna)
Title: How Standardizing Corporate Environmental Sustainability Information Reshapes Mutual Fund Green Investing: Evidence from the EU Taxonomy (joint with Sheran Deng - University of Vienna, and Li Gu - Fed Board)
Time: Wednesday, Dec. 18, 12 – 1 pm
Location: Seminar Room 6, OMP-1
Abstract: The EU Green Taxonomy regulation standardizes criteria for assessing the environmental performance of business activities and mandates public corporations to disclose their performance against this benchmark. We track mutual fund investing in EU firms throughout the implementation of the first phase of the taxonomy (related to climate change) from 2020 to 2023. We find that green funds reallocate portfolios towards high taxonomy-score firms. However, some green funds change to brown labels and they allocate portfolios away from high taxonomy-score firms during their exit from green labels. Ex-ante, these transitioning funds’ portfolios were less aligned with the taxonomy before the disclosure. As brown funds appear to move away from high taxonomy-score firms, we find no significant increase in aggregate holdings by both green and brown funds of high taxonomy-score firms, nor abnormal positive price reactions for the high taxonomy-score firms, suggesting adjustments by green and brown funds taken together may not benefit high taxonomy-score firms.

Speaker: Dongliang Lu (Sauder School of Business, University of British Columbia)
Title: Value-Destroying Activism
Time: Wednesday, Jan. 29, 12:00 – 1:30 pm
Location: Seminar Room 6, OMP-1
Abstract: I develop a dynamic agency model to study how activism affects firms’ governance. I show that while activism enhances shareholder value ex-post, it destroys value ex-ante by undermining shareholders’ ability to commit to governance policies. Existing shareholders respond to the threat of activism by replacing performance pay with monitoring after poor performance and relying less on deferred compensation. When the threat of activism is low, a rise in activism levels results in increased ex-post interventions and CEO turnover, while a high threat of activism leads to such stringent monitoring that interventions become unnecessary and the need for CEO turnover is redundant. The non-monotonic relationship between ex-ante and ex-post intervention frequencies suggests that the maximal level of deferred compensation, rather than observed interventions, is the appropriate empirical proxy for measuring the threat of activism.

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