Can removing names from loan applications help to reduce racial discrimination in lending? Our recent research suggests that it can. Analyzing a unique experiment at a leading fintech platform in Singapore, we find that anonymizing loan applications substantially reduced racial disparities in both loan approvals and terms. After anonymization, high-income minorities benefited more than low-income minorities, […]
Negative economic shocks can cause waves of investor pessimism about the resilience of banks, which in turn generate additional adverse macroeconomic effects. This column introduces the notion of pessimism in a real business cycle model. The possibility of waves of pessimism generates countercyclical demand from banks for liquid assets, such as bank reserves. Applying the […]
Stablecoin balance sheet structures closely resemble those of money market funds. This column finds that despite these similarities, their reactions to crypto and US monetary policy shocks are different. Following a crypto shock, the assets under management of money market funds barely bulge whereas the capitalisation of stablecoins drops significantly. After a monetary policy tightening, […]
