How much information about financial institutions' balance sheets should regulators pass on to the market? To minimize the probability of inefficient default, the regulator optimally designs a disclosure regime that imposes transparency when the firm has weak fundamentals and opacity,...

A liquidity-constrained asset owner designs an asset-backed security to raise funds from an informed liquidity supplier. Information insensitive securities reduce the liquidity supplier's informational rents. The issuer optimally screens the liquidity supplier's private information by offering a menu of debt...

We study how supply disruptions interact with monopoly pricing, inventory management, and consumer stockpiling in a continuous-time model. Preemption incentives---consumers prefer to stock up before a price hike while the firm prefers to hike before consumers stock up---lead to an...

We characterize the conditions under which a socially responsible (SR) fund induces firms to reduce externalities, even when profit-seeking capital is in perfectly elastic supply. Such impact requires that the SR fund's mandate permits the fund to trade off financial...

We analyze the run risk of fiat-backed stablecoins by uncovering a fundamental dilemma between stablecoins’ price stability and financial stability. We show that panic runs exist even though general investors only trade stablecoins in secondary markets with flexible prices. This...

We develop a theory of financial innovation in which both market structure and the payoffs of the claims being traded are determined endogenously. Intermediaries use the cash flows of an underlying asset to design securities for investors. Demand for securities...