Upcoming Talks:

Midwest Finance Association Conference, March 12-14, 2026, Chicago, IL, USA

Eastern Finance Association Conference & Early Career Forum, March 25-28, 2026, Asheville, NC, USA

WORKING PAPERS

1. Do 'MEASURES' of Bank Diversification Measure Up? (with Priyank Gandhi and Darius Palia)

• We analyze the effectiveness of several widely-used measures of bank product market diversification in capturing the diversification effect (i.e., the implication that diversification reduces idiosyncratic volatility of a portfolio of financial products). Contrary to the implications of modern portfolio theory, existing measures of bank product market diversification are poorly or positively correlated with idiosyncratic volatility. We instead propose the Correlation-Adjusted Entropy (CAE) measure that accounts for the number of product categories, category income shares, and the imperfect correlations among category incomes. CAE accurately captures the diversification effect and variation in CAE coincides with exogenous shocks to bank product market diversification (the passage of Dodd-Frank and Economic Growth Acts of 2013 and 2018, respectively), providing an important external validation for our measure. We use CAE to revisit the question of how bank product market diversification impacts performance and find that diversified banks are more profitable and have lower probability of bankruptcy, and lower tail and systemic risk, which is in stark contrast to findings in the literature that document mixed results.

Selected Presentations: Midwest Finance Association Conference, Eastern Finance Association Conference, American Finance Association Junior Faculty Mentorship Program, Financial Management Association Conference, Annual Financial Markets and Liquidity Conference, Sydney Banking and Financial Stability Conference, American Finance Association Committee on Racial Diversity, Auckland University of Technology, Central European University, University of Sydney, University of Melbourne, University of New South Wales, Victoria University

2. Exchange Heterogeneity in Cryptocurrency Volatility and Price Jumps (with Alan Chernoff, Le "Tim" Dong, and Juntai Lu) - Under Review

• Despite debate over cryptocurrencies as a medium of exchange, they remain primarily speculative assets, largely due to their high volatility. While prior research documents cryptocurrency volatility, less is known about whether it differs across trading venues. This paper examines cross-exchange variation in realized volatility and extreme price jumps using high-frequency transaction data. We find significant heterogeneity across international exchanges, though such differences are minimal among the largest and most liquid venues. The results suggest that exchange-specific microstructure features, including liquidity, market depth, and trading frictions, shape observed volatility and digital asset risk.

WORK IN PROGRESS 

The papers will be posted on SSRN shortly. Please feel free to contact me if you would like to receive preliminary drafts.

3. Bank Product Market Diversification and Lending (with Alan Chernoff and Juntai Lu)

• We examine the relationship between bank product market diversification and lending by measuring diversification across 16 business lines using a novel correlation-adjusted entropy metric. We find that more diversified banks exhibit greater growth in loan supply and stronger lending resilience during the Great Recession. The diversification effect differs depending on whether expansion occurs across interest income business lines or noninterest income activities. We further characterize the optimal level of diversification and discuss policy implications for financial stability. 

4. Executive Political Alignment and Bank Risk-Taking (with Priyank Gandhi and Juntai Lu)

• This paper examines whether executive political alignment affects bank risk-taking. We construct a novel measure of executive political alignment using political contribution data for senior executives of U.S. bank holding companies from 1992 to 2021. Exploiting within-bank changes in alignment, we study the relation between executive political alignment and multiple measures of bank risk, including tail risk, market-implied risk, downside risk, and non-performing loans. We find that shifts toward political alignment are followed by economically meaningful increases in bank risk-taking, consistent with political alignment relaxing perceived regulatory constraints or increasing expectations of government support.