Martin Waibel

I am a Ph.D. candidate in Finance at the Stockholm School of Economics. My research interests lie at the intersection of empirical asset pricing and empirical corporate finance, with a focus on financial intermediation, market microstructure, and machine learning applications. Specifically, I study how different instruments of the Basel regulations affect the intermediation capacity of regulated intermediaries, their spillovers on the behavior and performance of unregulated market participants, and the ultimate effect on liquidity and returns. In my research, I benefit from collaborations with the European Central Bank and the Federal Reserve Board of Governors. I hold a Master's degree in Economics from the University of Bonn and a Bachelor's degree in Economics from the University of Mannheim.

 

I am on the academic job market 2023-2024 and will be available for virtual interviews in conjunction with the EJME and the AFA/ASSA Meeting.

 

Job market paper: Managing Regulatory Pressure: Bank Regulation and Its Impact on Corporate Bond Intermediation

Abstract: We study how Basel regulations impact corporate bond intermediation in the cross-section of differently regulated intermediaries. Using intra-quarter variation in the intensity of Basel requirements, we document pronounced inventory contractions when regulatory pressure rises near quarter ends. In contrast to their behavior in short-term money markets, U.S. bank dealers do not absorb regulatory selling pressure in corporate bonds. Instead, bank dealers direct their selling primarily to nonbank financial intermediaries at sizeable price concessions. In doing so, they fall back on institutional investors to offload investment-grade bonds and nonbank dealers to dispose of high-yield bonds. In the aggregate, Basel leverage regulation significantly impairs liquidity conditions in the corporate bond market, specifically in balance sheet-intensive trades in which regulatory shadow costs account for up to 20% of average transaction costs. Our findings have implications for the design of future regulation of both bank and non-bank financial
intermediaries.