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I am an Assistant Professor in Finance at Tilburg University. My research interest are in banking, macro-finance and political economy. Email: m.a.rola-janicka@uvt.nl |
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Selected Research
The Good, the Bad and the Missed Boom
joint with Enrico Perotti
Some credit booms result in financial crises. While excessive risk-taking is a plausible cause, many investors do not anticipate increasing risk. We show how credit supply driven booms may be misunderstood as productivity driven, due to opaque bank balance sheets which disguise risk incentives. Funding shocks may sustain prudent lending (good boom), induce high risk exposure and boost asset prices (bad boom), or lead to underlending (missed boom). Rational agents drawing inference from prices amplify the effect of excess or scarce funding. Public information on total credit improves inference, but cannot avoid confusion when bank opacity is high.
Revise and Resubmit at Review of Financial Studies
Revise and Resubmit at Review of Financial Studies
The Political Economy of Prudential Regulation
Job Market Paper
This paper studies the equilibrium level of prudential regulation in a framework with negative borrowing externalities. A debt limit is implemented by a politician appointed through majoritarian elections. As voting allows borrowers to internalize the externality, equilibrium regulation restores constrained efficiency whenever the politician can commit to enforce it universally. Under selective enforcement, a captured regulator may exempt politically connected borrowers from regulation. Depending on the electoral power of the connected borrowers, the outcome may be an either too lax or too strict policy. The analysis deepens the understanding of the role of political economy factors in affecting equilibrium regulation. Additional results highlight the impact of income inequality on the strictness of the policy.
2020 Best Job Market Paper in Finance Theory
2020 Best Job Market Paper in Finance Theory