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Dr Matt Elliott

Matt Elliott

Title of research: Endogenous Financial Networks: Efficient Modularity and Why Shareholders Prevent It (joint with Jonathon Hazell, MIT)

We study the implications for systemic risk of the classic conflict of interest between debt-holders and equity-holders. Through trades banks can diversify idiosyncratic risks and avoid failures following small shocks. However, the resulting financial interdependencies can create systemic risk and the possibility of multiple failures following large shocks. A social planner would resolve this trade-off by creating modular financial networks. However, we assume equity-holders control banks and show their exist trades away from the efficient networks that increase equity value. Finally, we ask which trades are profitable more generally, and whether these systematically exacerbate or ameliorate systemic risk?

Project Update - August 2018

Project Update - April 2018

Project Update - August 2017

Project Update - April 2017

Project Update - July 2016

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CERF Fellow Dr. Bang Dang Nguyen - paper will be presented at the AFA Annual Meeting 2020 in San Diego

Sep 26, 2019

Political Connections and Firm Value: Evidence from Close Gubernatorial Elections, joint with Q.A. Do (SciencesPo Paris) and Yen-Teik Lee (Curtin University), is accepted and will be presented at the AFA Annual Meeting 2020 in San Diego.

CERF Scholar Shiqi Chen presented her paper at Leeds University Business School

Jun 28, 2019

Shiqi Chen presented her paper entitled “Financial Policies and Internal Governance with Heterogeneous Risk Preferences” (joint with Bart Lambrecht) in the Accounting and Finance seminar at Leeds University Business School, the Finance seminar at Essex Business School, CERF Lunch Seminar at Cambridge Judge Business School, and at the 2019 Annual Real Options Conference in London.

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