Stock Repurchases and the 2017 Tax Cuts and Jobs Act   

On December 22, 2017, President Trump signed the Tax Cuts and Jobs Act (TCJA), which is the largest gross tax cut in American history (cutting more than $5.5 trillion in taxes over 10 years); the act took effect on January 1, 2018. The TCJA has two key elements: (i) a reduction in the corporate income tax rate from 35 percent to 21 percent, and (ii) a one-time tax holiday that cuts the tax on cash repatriation from foreign subsidiaries from 35 percent to 15.5 percent. Furthermore, in connection with (ii), the U.S. corporate tax system also moved from a worldwide … Read more

Fintech and Banking

In a recent paper, I review the literature on fintech and its interaction with banking. Included in fintech are innovations in payment systems (including cryptocurrencies), credit markets (including peer-to-peer or “P2P” lending), and insurance, with blockchain-assisted smart contracts playing a role. My review paper defines fintech, examines the stylized facts, and then reviews the theoretical and empirical literature. The paper summarizes our knowledge on the main research  questions raised by the literature review and concludes with questions for future research.

Fintech is a hot topic, even though the interplay between information technology and financial services is not a new … Read more

How Are Bankers Paid?

Bank behavior and how it relates to bank fragility and systemic risk have been in the spotlight since the 2007-2009 financial crisis. Regulators claim that bankers’ compensation structures played a role in encouraging behavior which contributed to the financial crisis. Despite this, we know little about how finance industry executives are compensated. Executive compensation research typically does not distinguish finance industry executives from non-finance industry executives, and on many occasions it excludes executives in financial industries. Our new article, How Are Bankers Paid?, fills this void, studying how executive compensation in the finance industry differs from that of non-financial … Read more