Sustainable finance is a burgeoning sector, and the jury is still out on whether this is just a bubble, inflated by greenwashing practices, or a genuine step towards better ESG (environmental, social, and governance) conditions – or a combination of the two. Whatever the answer, sustainable finance is likely to remain high on the agenda… Read More »
The views expressed in this blog post and the associated paper are solely those of the author and do not necessarily reflect the views of the Federal Reserve Bank of Philadelphia, the Federal Reserve Board, or the Federal Reserve System. Any errors or omissions are the responsibility of the author. No statements here should be… Read More »
In our recent paper[1], we robustly document that firms have strong incentives to do good by serving a social purpose, as they not only perform well financially, but they also attract financially sophisticated investors with long-term orientation. What is important, however, is not only to do good by engaging in environmental, social, and governance (“ESG”) activities, but also… Read More »
There is ample evidence that some investors are inattentive and cause stock prices to fluctuate in ways that disagree with the rational framework. However, a less studied question in the behavioral finance literature is how firm managers respond to fluctuations in stock prices that stem from such irrational trading behaviors. In our recent paper, we exploit a… Read More »
On 15 March 1599, the people of Banda Island (Banda Lonthoir), in what is now eastern Indonesia (see Figure 1), beheld a foreign ship with an unknown flag. It turned out to be the Geldria, commanded by Dutch Admiral Jacob van Heemskerk, spearheading a Dutch merchant fleet. About two decades later, a violent and repressive attack… Read More »
The EU’s Fintech Action Plan (now Digital Finance Strategy) and the Sustainable Finance Strategy represent important pillars of the bloc’s current policy agenda. While the two areas have been treated as separate for a long time, they present certain common features and great potential if combined. The COVID-19 pandemic provides an opportunity for countries in… Read More »
Courtesy of James R. Barth and Yanfei Sun [1] “Industrial banks” are financial institutions that are probably a mystery to most Americans. Although they may not be household names, industrial banks (IBs) have existed for more than a century. Indeed, they pre-date the establishment of the Federal Reserve in 1913. Their names are a nod to… Read More »
Since the 2008 global financial crisis (GFC) exchange traded funds (ETFs) have experienced remarkable growth.[1] A recent Bloomberg report pegs the worldwide ETF market at over $5.3 trillion (up from $700 billion pre-GFC) with the U.S. accounting for nearly 70 percent of its size.[2] The number of available products has grown exponentially.[3] Product variety seems… Read More »
Initial Coin Offerings (also referred to as “ICOs” or “token sales”) are presenting new challenges for regulators in determining the application of securities laws. Until recently, the ICO market was unrestrained by law or regulation; inhibited only by investor appetite. But last month, the Securities and Exchange Commission (SEC), threw cold water on the ICO… Read More »
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