3rd Future of Financial Information Conference

The Call for Papers for Stockholm Business School’s 3rd Future of Financial Information Conference is now available. The conference, which features a dual submission option with the Review of Asset Pricing Studies and the Review of Corporate Finance Studies, will take place May 19-21, 2021, both virtually and on campus. The RAPS sponsoring editor is Thierry Foucault and the RCFS sponsoring editor is Andrew Ellul. The submission deadline is December 22, 2020. For more details, please see the conference web site.

Call for Papers: 2021 RCFS Winter Conference

The 2021 RCFS Winter Conference is now accepting submissions. Please see the Call for Papers and the Call for Registered Reports on Discrimination, Disparities, and Diversity in Finance for more details. The conference, which features a dual submission option with RCFS, will take place virtually on February 13 and 14, 2021. The sponsoring editors are Andrew Ellul, Isil Erel, Camelia Kuhnen, and Uday Rajan. The submission deadline is December 1, 2020, for papers and December 21, 2020, for registered reports.

Camelia Kuhnen Joins the RCFS Team

Camelia Kuhnen begins her role as an editor of RCFS today. Camelia is a professor of finance and Sarah Graham Kenan distinguished scholar at UNC Kenan-Flagler and a faculty research associate at NBER. She is an expert in household finance, neuroeconomics, and corporate finance. She is an associate editor at the Journal of Finance, the Review of Financial Studies, and Management Science. Camelia previously served as president of the Society for Neuroeconomics and as an associate editor of RCFS. Please join us in welcoming her to the team.

Paper Spotlight: Banks as Lenders of First Resort: Evidence from the COVID-19 Crisis

Lei Li

Philip E. Strahan

Song Zhang









The COVID-19 pandemic induced an unprecedented “stress test” on the financial system and the ability of banks to supply liquidity to the real economy. A new paper by Lei Li, Phil Strahan, and Song Zhang entitled “Banks as Lenders of First Resort: Evidence from the COVID-19 Crisis” starts with the following important observation: In the last three weeks of March 2020, banks faced the largest increase in takedowns under existing credit lines ever observed – a weekly growth in demand for bank commercial and industrial loans that is 50 times the average weekly growth of the last half century! This unexpected increase in demand for liquidity, due to the COVID-19 shock, created the stress test on banks. The authors find that large banks serving large customers absorbed most of the demand. And, most importantly, pre-COVID financial conditions did not constrain these large banks’ liquidity supply.

Spotlight by Isil Erel
Photos courtesy of Lei Li, Philip E. Strahan, and Song Zhang
First published July 10, 2020

Paper Spotlight: The Macroeconomics of Corporate Debt

Arvind Krishnamurthy

Markus Brunnermeier

As we emerge from the first wave of shocks induced by the COVID-19 pandemic, we need to start asking pressing questions regarding the future beyond the first round of emergencies. It is an appropriate time to start asking about the long-term adjustments that could be taking place in financial markets and economies and the research questions to match those challenges. This is the main objective of the paper “The Macroeconomics of Corporate Debt” written by Markus Brunnermeier and Arvind Krishnamurthy. One central feature is the high corporate indebtedness going in the crisis; the crisis has only strained firms’ debt services and led to a significant jump in bankruptcies. Leverage will determine the ability of firms to operate successfully in the future and deal with uncertainty. In the same way that the 2008 financial crisis zoomed in on the roles of bank capital structure and bank and nonbank short-term debt, so will this crisis attract attention to credit demand and credit frictions in the corporate sector. Markus and Arvind provide a broad roadmap for future research work that can shed light on corporate finance models. They argue that impactful positive and normative questions on the role of corporate debt, both from a theoretical and empirical perspective, can only be answered when integrating corporate finance into macroeconomic models.

Spotlight by Andrew Ellul
Photos courtesy of Markus Brunnermeier and Arvind Krishnamurthy

Paper Spotlight: Identifying the Real Effects of Zombie Lending

Fabiano Schivardi

Enrico Sette

Guido Tabellini








The impact of COVID-19 has driven many firms into financial distress, and policymakers around the world have responded with various emergency measures to support the business sector. While the immediate priority has been to get support out quickly to firms, over time more active decisions will have to be made on which firms should be supported. A potential danger that arises is that firms that should be allowed to shut down are kept alive as “zombie firms” through the provision of subsidized financing. The literature has found that diverting resources to zombie firms has a negative effect on healthy firms in the same industry. However, in the paper “Identifying the Real Effects of Zombie Lending,” Fabiano Schivardi, Enrico Sette, and Guido Tabellini argue that the literature may suffer from a serious identification problem. Often implicitly, and sometimes explicitly, firm performance is used to identify zombie firms. This is problematic, because a downturn in an industry may be associated with both declining performance of healthy firms and a narrowing of the performance gap between healthy and weak firms. There will therefore be a bias toward finding that healthy firms too suffer in a sector with a high proportion of zombie firms. In analyzing the effects of COVID-19, determining the extent to which zombie financing is a problem will be an important issue both for policymakers and for researchers.

Spotlight by Uday Rajan
Photos courtesy of Fabiano Schivardi, Enrico Sette, and Guido Tabellini
First published July 17, 2020