Working papers 

Abstract: Depository institutions have been progressively losing market share in the corporate loan market. We propose a model in which even small changes in the cost of funds advantage of banks can trigger transitions consistent with this pattern. We model banks as lenders who engage in more costly underwriting than other lenders, a cost borrowers must bear if they wish to reveal the quality of their project. Once the cost of funds advantage of banks becomes small enough, borrowers with risky projects find it optimal to transact with non-bank lenders and the availability of lower-information lending markets makes more transactions possible in equilibrium. In the span of a few decades, non-banks go from a fringe lender to firms to becoming the dominant lender. 

Presentations: Midwest Macro 2024*, EWET 2024*, Search and Matching Conference, Summer Meeting of the Econometric Society 2024*, State of Wisconsin Investment Board, SED Barcelona 2024, ECB DG-Research Internal Seminar, BIS Internal Seminar, ECB/Fed NY Annual Conference on NBFIs 2025 (discussant Giorgia Piacentino), MFA* (*: presentation by coauthor)