Business Administration Seminar with David Martinez-Miera

08-05-2019 from 11:30 to 13:00
Buffer right, 2nd floor, Sint-Pietersplein 7, 9000 Gent (department of Accounting, Corporate Finance & Taxation)
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Dear colleagues,


It is my pleasure to invite you to a Business Administration Seminar with David Martinez-Miera.


Date & hour: May 8th, 2019, 11h30 – 13h00

Room: Buffer right, 2nd floor, Sint-Pietersplein 7, 9000 Gent (department of Accounting, Corporate Finance & Taxation)




Titel: Interest Rates, Market Power and Financial Stability (joint with Rafael Repullo)



This paper analyzes the effects of policy rates on financial intermediaries’ risk-taking decisions. We consider an economy where (i) intermediaries have market power in granting loans, (ii) intermediaries monitor borrowers which lowers their probability of default, and (iii) monitoring is not observable which creates a moral hazard problem. We show that lower policy rates lead to lower intermediation margins and higher

risk-taking when intermediaries have low market power, but the result reverses for high market power. We also show that when intermediaries have high market power competition from (nonmonitoring) financial markets results in a U-shaped relationship between policy rates and risk-taking. The paper examines the robustness of these results to introducing heterogeneity in monitoring costs, entry and exit of intermediaries, and funding with deposits and capital.



David Martinez-Miera is Associate Professor of Finance at Universidad Carlos III de Madrid. He is also a research fellow at CEMFI and CEPR. David is one of the best young theoretical financial economists. He has published in top-journals such as Econometrica, the Review of Financial Studies and the Review of Finance. He is an associate editor at the Review of Finance, the International Review of Finance, and a panelist for Economic Policy.


With kind regards



Klaas Mulier

Associate Professor of Finance

Department of Accounting, Corporate Finance and Taxation

Campus Tweekerken, Sint-Pietersplein 7, 9000 Gent, Belgium

Phone: +32 (0)9  264 35 42

Personal webpage:

University webpage: