Working papers

















































































































Covid 19: A New Challenge for the European Monetary Union, joint with Alexis Guillaume

Although the pandemic was an exogenous shock, it triggered portfolio rebalancing in the Euro Area (EA) implying a divergence of sovereign risk premia in the first phase of the crisis eventually followed by a narrowing of the spreads. We estimate the determinants of sovereign bond spreads in the EA during the pandemic from January 2 2020 to May 25 2020. We find that: 1) the countries' resilience to the COVID shock depended on healthcare capacity, the strength of the banking sector and the fiscal outlook; 2) during the crisis, ECB speeches were a game changer and made a much greater contribution than securities purchase programs; 3) the Italian spread benefited most from the interventions of the European institution; 4) markets did not consider loans-based financial assistance program as working adjustment mechanisms as fiscal transfers would.

CEPR DP 14848

Companion website with Data Vizualization

Grey Zones in International Finance, joint with Amélie Guilin and Vincent Vicard

Tax avoidance schemes generate artificially complex cross-border financial structures inflating measured international investment stocks in tax havens. Using a standard gravity framework, we estimate that about 40\% of global assets (FDI, portfolio equity and debt) are 'abnormal' - unexplained - stocks. Abnormal stocks are increasing over time and concentrated in a limited number of jurisdictions. Six jurisdictions including three European countries are the largest contributors: Cayman, Bermuda, Luxembourg, Hong Kong, Ireland and the Netherlands. Interestingly, the Luxleaks in 2014 do not appear to have diverted cross-border investments away.



Credit under influence: Evidence from France, with A. Matray and N. Pinardon-Touati


Formally independent private banks change their supply of credit to the corporate sector for the constituencies of contested political incumbents in order to improve their reelection prospects. In return, politicians grant such banks access to the profitable market for loans to local public entities among their constituencies. We examine French credit registry data for 2007--2017 and find that credit granted to the private sector increases by 9\%--14\% in the year during which a powerful incumbent faces a contested election. In line with politicians returning the favor, banks that grant more credit to private firms in election years gain market share in the local public entity debt market after the election is held. Thus we establish that, if politicians can control the allocation of rents, then \it{formal} independence does not ensure the private sector's \it{effective} independence from politically motivated distortions.

Media coverage: Le Monde, Alter Eco, Les Echos, Libération

CEPR DP 14409


The transmission channels of unconventional monetary policy, Evidence from a change in collateral requirement in France, with Pranav Garg and Jean Imbs

Using a bank-firm level credit registry combined with firm-level balance sheet data we establish the presence of heterogeneity in the effects of unconventional monetary policy transmission. We examine the consequences of a loosening in the collateral eligibility requirement for credit refinancing in France. The policy was designed to affect bank lending positively. We expect a linear increase in lending and an additional increase in loans to firms with newly acceptable rating. We find a large heterogeneity of the monetary policy transmission including the unexpected reduction of lending by the banks benefiting the most from the policy. These are small, risk-averse banks whose foremost concern after the recession was to strengthen their balance sheets. Banks least affected by the policy respond with a reduction in credit to low risk borrowers in reaction tothe change in the market structure. Last we document heterogenous effects of the policy on firmsdepending on their size

CEPR DP 13693, voxeu column, online appendix


Banks defy Gravity, joint with V. Bouvatier and G. Capelle-Blancard


This paper provides the first quantitative assessment of the contribution of global banks inintermediating tax evasion. Applying gravity equations on a unique regulatory dataset based oncomprehensive individual country-by-country reporting from all the Systemically ImportantBanks the European Union, we find that: 1) Tax havens generate a threefold extra presence of foreign banks; 2) The favorite destinations of tax evasion intermediated by European banks are Luxembourg and Monaco 3) British and German banks display the most aggressive strategies in tax havens ; 4) New transparency requirements imposed in 2015 have not changed European banks commercial presence in tax havens; 5) Banks intermediate e550 billion ofoffshore deposits, that is 5% of their origin countries' GDP.

R&R Journal of Banking and Finance, CEPR DP 12222, voxeu column

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